Canada 10-Year Yield Rises on US Bond Selloff

2026-05-19 15:49 By Isabela Couto 1 min. read

Canada’s 10-year government bond yield rose to 3.74% in May, the highest level in over two years amid the surge in US long-term yields, even as soft domestic inflation data reinforced expectations that the BoC will not hike rates.

High energy prices and robust economic data in the US drove the yield on their 30-year bond to an 18-year high, spreading into North American bond markets.

Meanwhile, domestic headline inflation rose to 2.8% in April due to rising gasoline costs linked to the Middle East conflict.

Still, the Bank of Canada’s preferred core inflation gauges slowed more than expected to their lowest levels in five years, suggesting underlying price pressures outside energy have eased.

The data aligned with recent signals from the central bank that energy-driven inflation may prove temporary and reduced concerns over additional rate hikes.

Still, Governor Tiff Macklem has also warned that geopolitical tensions and trade uncertainty could still alter the policy outlook.



News Stream
Canada 10-Year Yield Rises on US Bond Selloff
Canada’s 10-year government bond yield rose to 3.74% in May, the highest level in over two years amid the surge in US long-term yields, even as soft domestic inflation data reinforced expectations that the BoC will not hike rates. High energy prices and robust economic data in the US drove the yield on their 30-year bond to an 18-year high, spreading into North American bond markets. Meanwhile, domestic headline inflation rose to 2.8% in April due to rising gasoline costs linked to the Middle East conflict. Still, the Bank of Canada’s preferred core inflation gauges slowed more than expected to their lowest levels in five years, suggesting underlying price pressures outside energy have eased. The data aligned with recent signals from the central bank that energy-driven inflation may prove temporary and reduced concerns over additional rate hikes. Still, Governor Tiff Macklem has also warned that geopolitical tensions and trade uncertainty could still alter the policy outlook.
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