Summary: ACGB gradient flatter; US Treasury curve gradient also flatter.
The gradient of the ACGB yield curve became flatter as yields fell at the long end. By the end of the week, the 3-year/10-year spread had tightened by 11bps to 54bps and the 3-year/20-year spread had lost 10bps to 105bps.
TThe gradient of the US Treasury curve also became flatter. The 2-year/10-year spread lost 22bps to 76bps while the 2 year/30 year spread shed 24bps to 109bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 12bps lower at 130bps.
To find out more about the yield curve and its usefulness, click here or here.
*December futures