Canada 10Y Bond Yield Hits 27-month High

Canada 10Y Bond Yield rose above 3.8, according to over-the-counter interbank yield quotes for this government bond maturity.

Canada’s 10-year government bond yield rose to 3.8% in September, an over two-year high, after the BoC highlighted upside risks to inflation. The BoC kept its key policy rate unchanged at 2.25% at its September meeting, as widely expected, but noted that inflation risks had increased while new tariffs had made the growth outlook more uncertain. It left the future path for monetary policy open, saying it would adjust policy as needed. Oil prices remained elevated amid supply disruptions stemming from the escalating Middle East conflict, adding to inflationary pressures and hawkish expectations for central banks. Meanwhile, markets are pricing in a nearly 66% chance of a 25-bps Fed rate hike later this month, up sharply from around 40% last week.

Canada 10 Year Government Bond Yield increased to 3.79%, the highest since May 2024. Over the past 4 weeks, Canada 10Y Bond Yield gained 19.00 basis points, and in the last 12 months, it increased 29.70 basis points.