Canada 10Y Bond Yield Hits 8-week Low

Canada 10 Year Government Bond Yield decreased to 3.77%, the lowest since September 2026. Over the past 4 weeks, Canada 10Y Bond Yield lost 15.70 basis points, and in the last 12 months, it increased 65.30 basis points.

Canada’s 10-year government bond yield was little changed at around 3.84%, following the Bank of Canada’s first interest rate hike in more than three years in October, a move that was widely expected. The central bank signalled that further increases may be necessary to prevent surging energy costs from feeding into broader inflation. It also raised its 2027 inflation forecast to 3.1% from 2.0% in July, while upgrading its growth outlook to 1% from 0.7%. Despite the hike, the policy rate remains below the estimated neutral level, which neither stimulates nor restrains economic activity. Meanwhile, speculation has grown over the possibility of a last-minute tariff-relief deal between Canada and the US that could provide a political boost to Republican candidates. Canadian Prime Minister Mark Carney, however, described only a slight intensification in trade discussions.

Canada’s 10-year government bond yield edged higher to around 3.85% in October as expectations for Bank of Canada policy shifted toward tighter monetary conditions. Markets anticipate a more hawkish tone at the BoC’s next policy decision, scheduled for October 28. Governor Tiff Macklem recently said the central bank expects to significantly raise its quarterly inflation forecast this month, following hawkish remarks last week about energy-driven price pressures. Rising oil prices have added to upward pressure on energy costs amid the escalation of the conflict in the Middle East. Meanwhile, Canadian retail sales are expected to have increased 0.7% month over month in September, extending a 1.2% gain in August, according to preliminary estimates. Stronger retail activity could add to inflation concerns and reinforce expectations for a tighter monetary policy stance.