Summary: Australian Commonwealth Government bond yield curve flatter or steeper depending on measure used; US Treasury curve generally steeper.
The gradient of the ACGB yield curve became flatter or steeper depending on how one measured it. By the end of the week, the 3-year/10-year spread had tightened by 7bps to 88bps while the 3-year/20-year spread had widened by 2bps to 154bps.
The gradient of the US Treasury curve acted in a slightly more consistent fashion. The 2-year/10-year spread added 1bp to 107bps and the 2 year/30 year spread gained 3bps to 172bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 2bps tighter at 123bps.
To find out more about the yield curve and its usefulness, click here or here.