Summary: ACGB curve flatter; US Treasury curve generally more negative.
The gradient of the ACGB yield curve became flatter this week as yields rose at the front of the curve. By the end of the week, the 3-year/10-year spread had tightened by 7bps to 25bps while the 3/20 year spread finished 10bps lower at 58bps.
The gradient of the US Treasury curve generally became more negative, although not for all measures. The 2-year/10-year spread had lost 4bps to -85bps by the end of the week while the 2 year/30 year spread finished 11bps lower at -87bps. However, the San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 13bps higher at -86bps.
To find out more about the yield curve and its usefulness, click here or here.