Summary: Australian gradient steeper; US Treasury curve flatter.
The gradient of the ACGB yield curve became a little steeper this week as yields rose at the long end. By the end of the week, the 3-year/10-year spread had widened by 2bps to 89bps and the 3-year/20-year spread had widened by 6bps to 154bps.
In contrast, the gradient of the US Treasury curve became flatter as yields at the long end fell modestly. The 2-year/10-year spread slipped 1bp to 108bps and 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 narrower at 123bps.
To find out more about the yield curve and its usefulness, click here or here.