The Canadian 10-year government bond yield held near 3.47% on Wednesday as traders balanced tentative signs of progress toward resolving the Middle East conflict against increasingly hawkish expectations for the US Federal Reserve. The stabilization followed a sharp rise in global yields in March, driven by fears of a protracted war and surging energy prices.
Market sentiment improved after President Donald Trump stated that Iran had requested a ceasefire and suggested the conflict could end within weeks, contingent on the reopening and securing of the Strait of Hormuz. These signals helped pull oil prices back from recent highs and eased demand for traditional safe-haven assets.
Even so, yields remained supported by stronger-than-expected US economic data: the private sector added 62,000 jobs in March, while retail sales rose 0.6%, indicating the economy still has capacity to absorb external shocks.
In Canada, the domestic outlook stayed cautious. Manufacturing activity stagnated in March, with the sector index slipping to 50.0, signaling flat growth for the industry.
