Summary: ACGB curve flatter; US Treasury curve moves inconsistently.
The gradient of the ACGB yield curve became flatter this week. By the end of the week, the 3-year/10-year spread had tightened by 8bps to 27bps while the 3/20 year spread finished 5bps lower at 68bps.
The traditional measures of the gradient of the US Treasury curve moved inconsistently. The 2-year/10-year spread added 2bps to -78ps over the week while the 2 year/30 year spread finished 6bps lower at -80bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 9bps higher at -72bps.
To find out more about the yield curve and its usefulness, click here or here.