Summary: ACGB gradient again flatter; US Treasury curve steeper, moves out of inverted territory.
The gradient of the ACGB yield curve became flatter as rises at the short end again outpaced rises elsewhere along the curve. By the end of the week, the 3-year/10-year spread had narrowed by 1bp to 28bps and the 3-year/20-year spread had lost 6bps to 54bps.
In contrast, the gradient of the US Treasury curve became steeper as some measures moved out of inverted territory. The 2-year/10-year spread widened by 27bps to 19bps while the 2 year/30 year spread gained 22bps to 20bps over the week. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 15bps wider at 202bps.
