Summary: Slope of ACGB curve a tad steeper; US Treasury curve gradient more negative.
The gradient of the ACGB yield curve became a tad steeper as yields fell. By the end of the week, the 3-year/10-year spread had ticked up 1bp to 38bps as did the 3/20 year spread which finished 1bp higher at 68bps.
The gradient of the US Treasury curve became more negative this week. The 2-year/10-year spread lost 4bps to -41bps and the 2 year/30 year spread finished 4bps lower at -27bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 7bps lower at -95bps.
To find out more about the yield curve and its usefulness, click here or here.