Summary: ACGB curve flatter; US Treasury curve also generally flatter.
The gradient of the ACGB yield curve became noticeably flatter as rises at the short end outpaced the gains elsewhere along the curve. By the end of the week, the 3-year/10-year spread had narrowed by 15bps to 32bps and the 3-year/20-year spread had shed 17bps to 64bps.
The gradient of the US Treasury curve also became flatter, although not for all measures. The 2-year/10-year spread tightened by 15bps to 23bps while the 2 year/30 year spread lost 19bps to 28bps over the week. However, the San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 4bps wider at 209bps.
