Summary: ACGB curve steeper; US Treasury curve largely unchanged.
The gradient of the ACGB yield curve became steeper this week. By the end of the week, the 3-year/10-year spread had widened by 5bps to 35bps while the 3/20 year spread also finished 5bps higher at 73bps.
The traditional measures of the gradient of the US Treasury curve remained largely unchanged. The 2-year/10-year spread slipped 1bp to -80ps over the week while the 2 year/30 year spread finished unchanged at -74bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 21bps lower at -81bps.
To find out more about the yield curve and its usefulness, click here or here.