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 4bps to 65bps and the 3-year/20-year spread had lost 7bps to 115bps.
The gradient of the US Treasury curve also became flatter. The 2-year/10-year spread shed 5bps to 98bps while the 2 year/30 year spread lost 7bps to 133bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 8bps lower at 142bps.
To find out more about the yield curve and its usefulness, click here or here.
*December futures