FX.co ★ Canada 10-Year Bond Yield Declines to 3-Month Lows

In August, the yield on Canada's 10-year government bond fell below 3.3%, hitting a three-month low. This decline was attributed to weakening labor markets in both Canada and the United States, which heightened expectations for more significant dovish actions by the Bank of Canada and the Federal Reserve. Canadian labor data revealed distinct slack, with unemployment rising to 7.1%—the highest level in four years—employment decreasing by 66,000, and participation falling to 65.1%, all of which bolstered the likelihood of BoC easing. Concurrently, long-term US Treasury yields saw a substantial decrease as US payroll and labor indicators showed significant cooling, reinforcing the anticipation of multiple rate cuts by the Fed and reducing global term premiums.