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 4bps to 33bps while the 3/20 year spread finished 2bps lower at 64bps.
The gradient of the US Treasury curve became more negative this week. The 2-year/10-year spread decreased by 7bps to -45bps and the 2 year/30 year spread finished 10bps lower at -33bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 6bps lower at -94bps.
To find out more about the yield curve and its usefulness, click here or here.