Summary: ACGB curve slightly steeper; US Treasury curve less negative.
The gradient of the ACGB yield curve became slightly steeper as yields declined. By the end of the week, the 3-year/10-year spread had added 3bps to 25bps while the 3/20 year spread finished 2bps higher at 46bps.
The traditional measures of the gradient of the US Treasury curve became a little less negative. The 2-year/10-year spread gained 8bps to -44bps over the week while the 2 year/30 year spread added 11bps to -49bps. However, the San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 9bps tighter at +41bps.
To find out more about the yield curve and its usefulness, click here or here.