Summary: ACGB gradient steeper; US Treasury curve flatter, although not for all measures.
The gradient of the ACGB yield curve became steeper as yields at the short end were outpaced by rises elsewhere along the curve. By the end of the week, the 3-year/10-year spread had widened by 8bp to 48bps* and the 3-year/20-year spread had gained 5bps to 86bps*.
The gradient of the US Treasury curve moved in a more-complicated fashion. The 2-year/10-year spread finished In contrast, the gradient of the US Treasury curve generally became flatter, although not for all measures. The 2-year/10-year spread tightened by 4bps to 21bps while the 2 year/30 year spread shed 12bps to 49bps over the week. However, the San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 13bps wider at 175bps.
