Summary: Australian Commonwealth Government bond yield curve flatter again; US Treasury curve gradient also flatter.
The gradient of the ACGB yield curve became a little flatter again as yields fell by slightly larger amounts at the long end. By the end of the week, the 3-year/10-year spread had tightened by 1bp to 108bps, while the 3-year/20-year spread finished 4bps tighter at 162bps.
The gradient of the US Treasury curve also became flatter. The 2-year/10-year spread narrowed by 5bps to 120bps while the 2 year/30 year spread decreased by 8bps to 180bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 7bps tighter at 140bps.
To find out more about the yield curve and its usefulness, click here or here.