Summary: Slope of ACGB curve becomes flatter; US Treasury curve gradient more negative/less positive.
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 4bps to 40bps while the 20 year spread finished 5bps lower at 78bps.
The gradient of the US Treasury curve became more negative/less positive for a second consecutive week. The 2-year/10-year spread lost 6bps to -17bps while the 2 year/30 year spread decreased by 8bps to +9bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 6bps lower at -133bps.
To find out more about the yield curve and its usefulness, click here or here.