Summary: ACGB curve steeper; US Treasury curve more negative.
The gradient of the ACGB yield curve became a little steeper this week as yields fell, although not for all measures. By the end of the week, the 3-year/10-year spread had returned to its starting point at 41bps while the 3/20 year spread finished 2bps higher at 88bps.
The gradient of the US Treasury curve became more negative in general. The 2-year/10-year spread slipped 2bps to -41bps over the week while the 2 year/30 year spread finished 6bps higher at -13bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 30bps lower at -127bps.
To find out more about the yield curve and its usefulness, click here or here.