Summary: Slope of ACGB curve a little steeper; US Treasury curve gradient considerably less inverted.
The gradient of the ACGB yield curve became a little steeper as yields fell. By the end of the week, the 3-year/10-year spread had added 2bps to 54bps while the 3/20 year spread also finished 2bps higher at 89bps.
The gradient of the US Treasury curve became considerably less inverted this week. The 2-year/10-year spread increased by 25bps to -18bps and the 2 year/30 year spread finished 27bps higher at -2bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 35bps higher at -52bps.
To find out more about the yield curve and its usefulness, click here or here.