Canada 10-Year Yield Hits Five-Week Low

Canada’s 10-year government bond yield fell to around 3.80% in October, its lowest level in five weeks, tracking a decline in global yields as a selloff in technology and AI stocks drove investors toward safe-haven government bonds. Concerns about the sustainability of AI spending in a high-interest-rate environment fueled a broader flight to safety. However, strong Canadian manufacturing sales boosted expectations of a Bank of Canada rate hike at its next meeting, with markets pricing in a 69.7% probability of an increase. Canadian manufacturing sales rose 1.5% month-over-month to C$79.9 billion in August 2026, beating expectations for a 1.1% increase and marking the sharpest rise since April. The upbeat data contrasted with recent signs of a cooling economy. Employment fell by 68,300, far below expectations for a 7,000 increase, pointing to a weaker start to the third quarter.