Canada 10Y Bond Yield Hits 9-week Low

Canada 10 Year Government Bond Yield decreased to 3.39%, the lowest since April 2026. Over the past 4 weeks, Canada 10Y Bond Yield lost 18.30 basis points, and in the last 12 months, it increased 8.15 basis points.

Canada’s 10-year government bond yield held steady near 3.5% after the Bank of Canada left its benchmark interest rate unchanged at 2.25%, in line with expectations. The central bank noted that uncertainty remains elevated amid escalating tensions in the Middle East and new US tariff proposals, while reiterating that it stands ready to act if necessary and will not allow higher energy prices to feed persistent inflation. Markets continue to price in a 25bps rate hike by December. However, the 10-year yield remains below its May highs, tracking a decline in US Treasury yields as investors speculate that a potential US–Iran agreement could help ease geopolitical tensions.

Canada's 10-year government bond yield rose to 3.43% in early June as escalating trade tensions and renewed conflict in the Middle East increased inflation concerns. Tensions in the Gulf intensified after Iranian attacks on Kuwait, while US strikes near the Strait of Hormuz and limited diplomatic progress clouded prospects for a resolution. Oil prices remained above $95 per barrel, fueling worries about energy-driven inflation and supporting higher bond yields. Meanwhile, the Bank of Canada is widely expected to leave interest rates unchanged at next week's meeting and avoid signaling a clear tightening bias. Weak domestic demand and a slowing economy continue to limit underlying inflation pressures, reinforcing expectations of a neutral policy stance.