Canada 10-Year Bond Yield Rises After Strong Labor Data

The yield on Canada’s 10 year government bond rose past 3.41% as markets reassessed the outlook for Bank of Canada policy following firmer domestic labour data. January figures showed the unemployment rate falling to 6.5%, full time employment continuing to grow year on year and wage growth holding near 3.3%, reinforcing evidence that labour market slack is not widening decisively and that rapid near term rate cuts are less likely. The move was amplified by higher global rates as the US 10 year also firmed toward the low 4% area. Bank of Canada messaging cautioning against premature easing and highlighting uncertainty around structural versus cyclical weakness has further supported higher term premia, keeping upward pressure on longer dated Canadian yields.

The yield on Canada’s 10 year government bond climbed past 3.45%, the highest in nearly a month, as a firmer US yield backdrop and tighter cross border duration pricing outweighed softer domestic fundamentals. US 10 year yields were testing their highest levels since August, supported by stronger US activity data and a reassessment of Federal Reserve policy following the nomination of Kevin Warsh, lifting the US risk free curve and increasing the opportunity cost of holding Canadian duration. Domestically, upside in Canadian yields remained constrained after real GDP was essentially flat in November and goods producing industries contracted 0.3%, marking the third decline in four months and reinforcing signs of excess capacity. That backdrop was echoed by the Bank of Canada’s decision on January 28 to hold the policy rate at 2.25% while stressing data dependence and lingering slack, limiting the case for a more restrictive stance and capping domestic yield pressure.

Canada 10 Year Government Bond Yield increased to 3.45%, the highest since January 2026. Over the past 4 weeks, Canada 10Y Bond Yield gained 2.30 basis points, and in the last 12 months, it increased 43.20 basis points.