Summary: Slope of ACGB curve slightly flatter; US Treasury curve gradient more negative.
The gradient of the ACGB yield curve became slightly flatter as yields fell. By the end of the week, the 3-year/10-year spread had lost 2bps to 31bps. However, the 3/20 year spread finished 5bps higher at 69bps after 20-year yields remained unchanged at the end of the week while shorter-term yields fell.
The gradient of the US Treasury curve became more negative again this week. 2-year/10-year and 2 year/30 year spreads both decreased by 3bps to -48bps and -36bps respectively. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 21bps lower at -115bps.
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