Summary: ACGB curve steeper; US Treasury curve moves inconsistently.
The gradient of the ACGB yield curve became steeper as the falls of shorter-term Australian yields outpaced the falls of their longer-term counterparts. By the end of the week, the 3-year/10-year spread had gained 9bps to 31bps while the 3-year/20-year spread had widened by 19bps to 66bps.
The various measures of the gradient of the US Treasury curve moved inconsistently as all but ultra-long fell. The 2-year/10-year spread stayed in inverted territory as returned to its starting point at -23bps while the 2 year/30 year spread gained 14bps to +13bps over the week. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 6bps narrower at 28bps.
To find out more about the yield curve and its usefulness, click here or here.