FX.co ★ Canada 10-Year Bond Yield Near 2-Year Lows

The yield on Canada's 10-year government bond recently declined to approximately 2.85%, closely approaching the two-year low of 2.83% that was observed in early March. This movement reflects investors' shift towards safe-haven assets driven by increasing global and domestic concerns. Notably, escalating trade tensions have been a significant factor, catalyzed by President Trump's imposition of a comprehensive 10% tariff on all imports and China's imminent 34% retaliatory tariff on U.S. products—events that have amplified fears of a potential global recession. Domestically, the Canadian economy is showing signs of strain, highlighted by the loss of 32,600 jobs in March and a climb in the unemployment rate to 6.7%, signaling a faltering labor market and raising concerns about the country's economic outlook. Additionally, with oil prices plummeting over 7% and critical exports encountering new trade barriers, the pressure on economic growth has intensified. As the Bank of Canada gears up for its policy meeting on April 16, there is a growing expectation that it will maintain a dovish approach in light of the worsening conditions.