Canada 10Y Bond Yield Hits 5-week Low

Canada’s 10-year government bond yield fell to around 3.80% in October, its lowest level in five weeks, tracking a decline in global yields as a selloff in technology and AI stocks drove investors toward safe-haven government bonds. Concerns about the sustainability of AI spending in a high-interest-rate environment fueled a broader flight to safety. However, strong Canadian manufacturing sales boosted expectations of a Bank of Canada rate hike at its next meeting. Canadian manufacturing sales rose 1.5% month-over-month to C$79.9 billion in August 2026, beating expectations for a 1.1% increase and marking the sharpest rise since April. The upbeat data contrasted with recent signs of a cooling economy. Employment fell by 68,300, far below expectations for a 7,000 increase, pointing to a weaker start to the third quarter.

Canada 10 Year Government Bond Yield decreased to 3.79%, the lowest since September 2026. Over the past 4 weeks, Canada 10Y Bond Yield lost 7.40 basis points, and in the last 12 months, it increased 75.40 basis points.

Canada’s 10-year government bond yield fell to around 3.9% after reaching a three-year high of over 4% on October 1st, despite higher yields in the US, as weaker employment data reinforced expectations that the Bank of Canada will refrain from hiking rates. Employment fell by 68,300, missing expectations for a 7,000 increase, while the unemployment rate edged up 0.1 percentage point to 6.5%. Recent data also pointed to a cooling economy. Real GDP estimates rose 0.2% in August, as gains in mining and quarrying and retail trade partly offset a decline in oil and gas extraction. GDP was essentially unchanged in July, ending a three-month growth streak. Although August’s result matched expectations, it highlighted a weaker start to the third quarter. Meanwhile, elevated oil prices continued to fuel inflation concerns and expectations of further rate hikes by central banks, keeping global bond markets under pressure. The US 10-year Treasury yield remained near multi-decade highs.