Summary: ACGB curve flatter; US Treasury curve still negative/flatter.
The gradient of the ACGB yield curve became flatter as longer-term Australian yields fell. By the end of the week, the 3-year/10-year spread had lost 6bps to 22bps while the 3-year/20-year spread had tightened by 5bps to 47bps.
The various measures of the gradient of the US Treasury curve either stayed in negative territory or became flatter as US yields fell. The 2-year/10-year spread moved further into inverted territory as it lost 2bps to -23bps while the 2 year/30 year spread gained 3bps to -1bp over the week. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 24bps narrower at 34bps.
To find out more about the yield curve and its usefulness, click here or here.