Summary: Slope of ACGB curve flatter; US Treasury curve gradient less negative.
The gradient of the ACGB yield curve became flatter as yields rose. By the end of the week, the 3-year/10-year spread had tightened by 7bps to 27bps while the 20 year spread finished 10bps lower at 56bps.
The gradient of the US Treasury curve became less negative again this week. The 2-year/10-year spread gained 12bps to -36bps while the 2 year/30 year spread increased by 14bps to -20bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 13bps higher at -97bps.
To find out more about the yield curve and its usefulness, click here or here.