FX.co ★ Canada 10-Year Bond Yield Surges to Over 1-Week High

The yield on Canada’s 10-year government bond surged past 3.23%, reaching its highest level in over a week. This movement followed a pronounced global sell-off in sovereign debt, initiated by a significant increase in Japanese yields after the Bank of Japan hinted at a potential rate hike this month. This development prompted investors to reevaluate global interest rate differentials, leading to diminished demand for long-term bonds worldwide and consequently pushing North American yields upward. In Canada, this trend was further supported by the release of stronger-than-expected third-quarter GDP data, which indicated an annualized growth rate of 2.6%. This data suggests limited immediate scope for easing by the Bank of Canada, while broader fiscal deficits hint at increased bond issuance in the future. As global yields continue to rise and domestic interest rate cuts appear less imminent, Canadian long-term rates have risen in alignment with their counterparts in the United States, United Kingdom, and Eurozone.