Summary: Australian Commonwealth Government bond yield curve flatter; US Treasury curve gradient also flatter.
The gradient of the ACGB yield curve became slightly flatter again as longer-term yields fell. By the end of the week, the 3-year/10-year spread had tightened by 4bps to 141bps while the 3-year/20-year spread had lost 3bps to 211bps.
The gradient of the US Treasury curve also became flatter. The 2-year/10-year spread tightened by 6bps to 145bps while the 2 year/30 year spread declined by 9bps to 213bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 7bps tighter at 157bps.
To find out more about the yield curve and its usefulness, click here or here.