Summary: Gradient of ACGB curve flattens; US Treasury curve gradient moves haphazardly.
The gradient of the ACGB yield curve became flatter as yields rose modestly at the short end while longer-term yields declined. By the end of the week, the 3-year/10-year spread had lost 7bps to 58bps while the 20-year spread shed 6bps to 101bps.
Movements of the gradient of the US Treasury curve were haphazard. The 2-year/10-year spread tightened by 5bps to +34bps while the 2-year/30-year spread added 2bps to +58bps. The San Francisco Fed’s favoured recession-predicting measure, the 3-month/10-year Treasury spread, finished 13bps lower at +32bps.
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