Canada 10-Year Bond Yield Drops From July Highs

2026-03-13 15:00 By Felipe Alarcon 1 min. read

The yield on Canada’s 10-year government bond fell toward 3.48%, retreating from the highest since July as a weakening domestic labor market and cooling industrial activity reshaped the monetary policy outlook.

The unemployment rate rose to 6.7% in February following a loss of 83,900 jobs which signaled a deeper contraction in the productive economy and reduced the likelihood of further tightening.

Manufacturing sales also declined 3% in January as industrial subsectors faced headwinds from weakening demand.

While energy prices remain elevated near 100 dollars per barrel the market is prioritizing signs of economic slack and the 0.6% contraction in growth recorded in late 2025.

These developments suggest a widening output gap that limits the ability of policymakers to maintain a restrictive stance despite global commodity volatility.

Investors are now pricing in a more cautious approach as the softening labor market offsets the inflationary impact of supply chain shocks.



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Canada 10-Year Bond Yield Drops From July Highs
The yield on Canada’s 10-year government bond fell toward 3.48%, retreating from the highest since July as a weakening domestic labor market and cooling industrial activity reshaped the monetary policy outlook. The unemployment rate rose to 6.7% in February following a loss of 83,900 jobs which signaled a deeper contraction in the productive economy and reduced the likelihood of further tightening. Manufacturing sales also declined 3% in January as industrial subsectors faced headwinds from weakening demand. While energy prices remain elevated near 100 dollars per barrel the market is prioritizing signs of economic slack and the 0.6% contraction in growth recorded in late 2025. These developments suggest a widening output gap that limits the ability of policymakers to maintain a restrictive stance despite global commodity volatility. Investors are now pricing in a more cautious approach as the softening labor market offsets the inflationary impact of supply chain shocks.
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