Canada 10-Year Yield Rises Toward Three-Year High
Canada’s 10-year government bond yield rose to near 4% in late September, approaching a three-year high as the US Treasury selloff resumed. Global government bonds have come under pressure as Middle East-driven oil price gains fuel expectations that central banks, including the Fed, will raise interest rates further. In the US, strong economic activity, along with concerns over large fiscal deficits and rising government debt, is also weighing on the bond market. In contrast, Canada’s advance estimates showed real GDP increased 0.2% in August, with gains in mining and quarrying and retail trade partly offset by a decline in oil and gas extraction. GDP was essentially unchanged in July, ending a three-month run of growth. The result was in line with expectations but highlighted a weaker start to the third quarter, reinforcing expectations for the Bank of Canada to hold rates. The US ban on various Canadian goods, also took effect, further weighing on growth prospects.
Canada’s 10-year government bond yield rose to near 4% in late September, approaching a three-year high as the US Treasury selloff resumed. Global government bonds have come under pressure as Middle East-driven oil price gains fuel expectations that central banks, including the Fed, will raise interest rates further. In the US, strong economic activity, along with concerns over large fiscal deficits and rising government debt, is also weighing on the bond market. 2% in August, with gains in mining and quarrying and retail trade partly offset by a decline in oil and gas extraction.
GDP was essentially unchanged in July, ending a three-month run of growth. The result was in line with expectations but highlighted a weaker start to the third quarter, reinforcing expectations for the Bank of Canada to hold rates. The US ban on various Canadian goods, also took effect, further weighing on growth prospects.