Canada 10-Year Yield Falls as Oil Prices Ease

2026-05-07 15:23 By Isabela Couto 1 min. read

Canada’s 10-year government bond yield fell to 3.5% from the two-year high of 3.62% on May 4th, as a sharp drop in oil prices limited pro-inflationary risks in Canada's economy.

Crude prices declined on signs that the US is attempting to end the war with Iran after sending Tehran a memorandum that could start restoring tanker flows in the Persian Gulf.

The retreat in oil prices reinforced the Bank of Canada’s decision to not include hawkish signals in its latest rate decision.

The central bank held its rate unchanged and noted that so far, there are little risks that higher oil prices should trigger a broad increase in underlying price growth that de-anchors inflation expectations. Higher oil prices had driven Canada's headline inflation rate to rise to 2.4% in March.



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Canada 10-Year Yield Falls as Oil Prices Ease
Canada’s 10-year government bond yield fell to 3.5% from the two-year high of 3.62% on May 4th, as a sharp drop in oil prices limited pro-inflationary risks in Canada's economy. Crude prices declined on signs that the US is attempting to end the war with Iran after sending Tehran a memorandum that could start restoring tanker flows in the Persian Gulf. The retreat in oil prices reinforced the Bank of Canada’s decision to not include hawkish signals in its latest rate decision. The central bank held its rate unchanged and noted that so far, there are little risks that higher oil prices should trigger a broad increase in underlying price growth that de-anchors inflation expectations. Higher oil prices had driven Canada's headline inflation rate to rise to 2.4% in March.
2026-05-07
Canada 10-Year Bond Yield Rises
Canada’s 10-year government bond yield rose to 3.62% on May 4th, as a sharp jump in energy prices stoked concerns about a potential inflation shock. Reports of attacks in the UAE helped push oil prices sharply higher, reinforcing fears that elevated crude costs could feed into broader price pressures. That comes after March inflation had already shown the impact of higher energy prices on Canada’s CPI, keeping markets alert to renewed upside risks. At the same time, GDP stalled in March, a softer reading that could help limit further gains in yields by underscoring weaker growth. The Bank of Canada recently held rates unchanged, saying inflation expectations remain anchored, while stronger March earnings reduced the urgency for near-term cuts.
2026-05-04
Canada 10-Year Bond Yield Down on Subdued GDP
Canada's 10-year government bond yield fell to 3.56% from a 2-year high 3.61% on April 29th as a pullback in oil prices and muted GDP data pressed against the outlook of overly restrictive policy for the Bank of Canada. Fresh data showed that the Canadian GDP stalled in March, reflecting some impact of high energy prices on aggregate spending. The result was aligned with the Bank of Canada's latest policy decision, which left rates unchanged, but stated that the outlook on inflation is stable as the increase in energy prices have so far not threatened inflation expectations from households. On the other hand, average earnings rose sharply in March, limiting the need for imminent rate cuts this year.
2026-04-30