Summary: Australian gradient flatter; US Treasury curve flatter.
The gradient of the ACGB yield curve became somewhat flatter again this week as yields fell at both the short end and the long end. By the end of the week, the 3-year/10-year spread had narrowed by 3bps to 86bps and the 3-year/20-year spread had narrowed by 4bps to 150bps.
The gradient of the US Treasury curve also became flatter as yields at the long end fell moderately. The 2-year/10-year spread lost 4bps to 104bps and the 2 year/30 year spread shed 7bps to 165bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 2bps narrower at 121bps.
To find out more about the yield curve and its usefulness, click here or here.