Summary: Australian Commonwealth Government bond yield curve flatter again; US Treasury curve gradient also flatter.
The gradient of the ACGB yield curve became flatter again as yields fell by larger amounts at the long end. By the end of the week, the 3-year/10-year spread had tightened by 9bps to 97bps and the 3-year/20-year spread finished 5bps tighter at 157bps.
The gradient of the US Treasury curve also became flatter. The 2-year/10-year spread narrowed by 5bps to 115bps and the 2 year/30 year spread decreased by 2bps to 178bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 9bps tighter at 131bps.
To find out more about the yield curve and its usefulness, click here or here.