Summary: Slope of ACGB curve steepens; US Treasury curve gradient generally less negative.
The gradient of the ACGB yield curve became steeper as yields fell. By the end of the week, the 3-year/10-year spread had gained 5bps to 42bps while the 20 year spread finished 10bps higher at 82bps.
The gradient of the US Treasury curve generally became less negative and, by some measures, more positive this week. The 2-year/10-year spread gained 9bps to -9bps while the 2 year/30 year spread increased by 14bps to +22bps. However, the San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 28bps lower at -137bps.
To find out more about the yield curve and its usefulness, click here or here.