Summary: Australian gradient steeper; US Treasury curve gradient changes inconsistent.
The gradient of the ACGB yield curve again steepened a touch as yields declined a touch at the short end and rose a touch at the long end. By the end of the week, the 3-year/10-year spread had widened by 1bp to 93bps and the 3-year/20-year spread had increased by 2bps to 156bps.
The gradient of the US Treasury curve changed in an inconsistent fashion as yields rose along the curve with the exception of the ultra-long end. The 2-year/10-year spread remained unchanged at 112bps while the 2 year/30 year spread shed 2bps to 172bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 2bps wider at 130bps.
To find out more about the yield curve and its usefulness, click here or here.