Summary: ACGB curve flatter; US Treasury curve more negative.
The gradient of the ACGB yield curve became steeper this week as yields rose. By the end of the week, the 3-year/10-year spread had widened by 5bps to 30bps while the 3/20 year spread finished 3bps higher at 61bps.
The gradient of the US Treasury curve became more negative. The 2-year/10-year spread had shed 6bps to -91bps by the end of the week while the 2 year/30 year spread finished 12bps lower at -99bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 3bps lower at -89bps.
To find out more about the yield curve and its usefulness, click here or here.