Summary: Slope of ACGB curve flatter; US Treasury curve gradient generally more negative.
The gradient of the ACGB yield curve became flatter as yields fell. By the end of the week, the 3-year/10-year spread had returned to its starting point at 43bps while the 3/20 year spread finished 3bps lower at 71bps.
The gradient of the US Treasury curve generally became more negative this week. The 2-year/10-year spread lost 3bps to -42bps and the 2 year/30 year spread finished 7bps lower at -28bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 1bp higher at -115bps.
To find out more about the yield curve and its usefulness, click here or here.