Summary: ACGB curve flatter; US Treasury curve generally less negative.
The gradient of the ACGB yield curve became flatter this week as yields fell, but not for all measures. By the end of the week, the 3-year/10-year spread had narrowed by 4bps to 26bps while the 3/20 year spread finished 3bps higher at 64bps.
The gradient of the US Treasury curve generally became less negative. The 2-year/10-year spread gained 2bps to -89bps over the week while the 2 year/30 year spread finished 11bps higher at -88bps. However, the San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 32bps lower at -121bps.
To find out more about the yield curve and its usefulness, click here or here.