Canada’s 10-year government bond yield rallied to 1.7% in late October, a level not seen since December 31st of 2019, bolstered by a global bond selloff and hopes of a hawkish turn in Bank of Canada’s monetary policy. Consumer prices rose 4.4% in September, the most since February 2003, led by transportation costs, shelter, and food prices. The current inflationary environment, coupled with employment figures at pre-pandemic levels, adds pressure to the central bank’s plan to keep interest rates near zero until the second half of 2022, while market expectations point to a rate hike in April.
Historically, the Canada Government Bond 10Y reached an all time high of 12.44 in March of 1985. Canada Government Bond 10Y - data, forecasts, historical chart - was last updated on October of 2021.
The Canada Government Bond 10Y is expected to trade at 1.66 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.90 in 12 months time.