Summary: ACGB curve steeper; US Treasury curve less negative.
The gradient of the ACGB yield curve became steeper this week as yields fell. By the end of the week, the 3-year/10-year spread had tightened by 15bps to 41bps while the 3/20 year spread finished 22bps higher at 86bps.
The gradient of the US Treasury curve became less negative. The 2-year/10-year spread jumped 50bps to -39bps over the week while the 2 year/30 year spread finished 69bps higher at -19bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 24bps lower at -97bps.
To find out more about the yield curve and its usefulness, click here or here.