Summary: Australian Commonwealth Government bond yield curve slightly flatter; US Treasury curve gradient a little steeper.
The gradient of the ACGB yield curve became slightly flatter as longer-term yields fell moderately. By the end of the week, the 3-year/10-year spread had tightened by 4bps to 145bps while the 3-year/20-year spread had lost 6bps to 214bps.
In contrast, the gradient of the US Treasury curve became a little steeper. The 2-year/10-year spread widened by 3bps to 151bps while the 2 year/30 year spread increased by 2bps to 222bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 2bps wider at 164bps.
To find out more about the yield curve and its usefulness, click here or here.