Summary: Slope of ACGB curve flatter; US Treasury curve gradient more inverted.
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 lost 5bps to 44bps while the 3/20 year spread finished 8bps lower at 74bps.
The gradient of the US Treasury curve became more inverted again this week. The 2-year/10-year spread lost 16bps to -35bps while the 2 year/30 year spread also finished 16bps lower at -17bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 27bps lower at -88bps.
To find out more about the yield curve and its usefulness, click here or here.