Summary: Australian Commonwealth Government bond yield curve considerably flatter; US Treasury curve gradient flatter.
he gradient of the ACGB yield curve became considerably flatter as yields fell. By the end of the week, the 3-year/10-year spread had tightened by 15bps to 126bps while the 3-year/20-year spread had lost 16bps to 195bps.
The gradient of the US Treasury curve also became flatter. The 2-year/10-year spread tightened by 9bps to 131bps while the 2 year/30 year spread also fell by 9bps to 199bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 10bps tighter at 143bps.
To find out more about the yield curve and its usefulness, click here or here.