Summary: ACGB curve steeper; US Treasury curve slightly less negative.
The gradient of the ACGB yield curve became steeper as yields declined noticeably at the short end. By the end of the week, the 3-year/10-year spread had gained 12bps to 37bps while the 3/20 year spread finished 16bps higher at 62bps.
The traditional measures of the gradient of the US Treasury curve became slightly less negative. The 2-year/10-year spread inched up 1bp to -43bps over the week while the 2 year/30 year spread added 2bps to -47bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 9bps tighter at +50bps.
To find out more about the yield curve and its usefulness, click here or here.