The binary brown dwarf WISE J104915.57 - 531906.1 ( also Luhman 16AB ) , composed of a late L and early T dwarf , is a prototypical L/T transition flux reversal binary located at only 2 pc distance . Luhman 16B is a known variable whose light curves evolve rapidly . We present spatially resolved spectroscopic time-series of Luhman 16A and B covering 6.5 h using HST/WFC3 at 1.1 to 1.66 \mu m. The small , count-dependent variability of Luhman 16A at the beginning of the observations likely stems from instrumental systematics ; Luhman 16A appears non-variable above \approx 0.4 % . Its spectrum is well fit by a single cloud layer with intermediate cloud thickness ( f _ { \mathrm { sed } } = 2 , T _ { \mathrm { eff } } = 1200 K ) . Luhman 16B varies at all wavelengths with peak-to-valley amplitudes of 7-11 % . The amplitude and light curve shape changes over only one rotation period . The lowest relative amplitude is found in the deep water absorption band at 1.4 \mu m , otherwise it mostly decreases gradually from the blue to the red edge of the spectrum . This is very similar to the other two known highly variable early T dwarfs . A two-component cloud model accounts for most of the variability , although small deviations are seen in the water absorption band . We fit the mean spectrum and relative amplitudes with a linear combination of two models of a warm , thinner cloud ( T _ { \mathrm { eff } } = 1300 K , f _ { \mathrm { sed } } = 3 ) and a cooler , thicker cloud ( T _ { \mathrm { eff } } = 1000 - 1100 K , f _ { \mathrm { sed } } = 1 ) , assuming out-of-equilibrium atmospheric chemistry . A cloud as for Luhman 16A but with holes can not reproduce the variability of Luhman 16B , indicating more complex cloud evolution through the L/T transition . The projected separation of the binary has decreased by \approx 0 \farcs 3 in 8 months .