Canada 10-Year Yield Rebounds Slightly
Canada’s 10-year government bond yield edged higher to around 3.7% from a two-month low of 3.65% reached on November 9th, tracking the increase in its US counterpart. US Treasury yields climbed after hotter-than-expected inflation data in October reinforced expectations of further Federal Reserve rate hikes. Most market participants are also pricing in a Bank of Canada rate hike due to high inflation. In Canada, annual inflation rose to 3.1% in September from 3.0% in August, its highest level since May’s 3.2%. The increasing prices follow up on a recovering economy with Q2 GDP growth soaring to 0.8%, while the Democratic Party victory in US mid-term elections could soften trade pressures on Canadian growth. Limiting the hawkish certainty, employment fell by 4,700 in October, missing expectations for a 13,600 increase.
Canada’s 10-year government bond yield edged higher to around 3.7% from a two-month low of 3.65% reached on November 9th, tracking the increase in its US counterpart. US Treasury yields climbed after hotter-than-expected inflation data in October reinforced expectations of further Federal Reserve rate hikes. Most market participants are also pricing in a Bank of Canada rate hike due to high inflation. In Canada, annual inflation rose to 3.1% in September from 3.0% in August, its highest level since May’s 3.2%.
The increasing prices follow up on a recovering economy with Q2 GDP growth soaring to 0.8%, while the Democratic Party victory in US mid-term elections could soften trade pressures on Canadian growth. Limiting the hawkish certainty, employment fell by 4,700 in October, missing expectations for a 13,600 increase.