Summary: ACGB curve steeper; US Treasury curve more negative.
The gradient of the ACGB yield curve became steeper as yields rose. By the end of the week, the 3-year/10-year spread had gained 4bps to 46bps while the 3/20 year spread finished 6bps higher at 81bps.
The traditional measures of the gradient of the US Treasury curve became more negative. The 2-year/10-year spread shed 13bps to -52bps over the week while the 2 year/30 year spread lost 18bps to -44bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 1bp tighter at -5bps.
To find out more about the yield curve and its usefulness, click here or here.