Canada 10-Year Yield Rebounds Slightly

Canada’s 10-year government bond yield edged higher to around 3.7% from a two-month low of 3.65% reached on November 9th, tracking the increase in its US counterpart. US Treasury yields climbed after hotter-than-expected inflation data in October reinforced expectations of further Federal Reserve rate hikes. Most market participants are also pricing in a Bank of Canada rate hike due to high inflation. In Canada, annual inflation rose to 3.1% in September from 3.0% in August, its highest level since May’s 3.2%. The increasing prices follow up on a recovering economy with Q2 GDP growth soaring to 0.8%, while the Democratic Party victory in US mid-term elections could soften trade pressures on Canadian growth. Limiting the hawkish certainty, employment fell by 4,700 in October, missing expectations for a 13,600 increase.

Canada’s 10-year government bond yield wavered around 3.65% in November, near its lowest level in two months, as markets are assessing weak employment data. Canadian employment fell by 4,700 in October, improving from September’s 68,300 decline but missing forecasts for a 13,600 increase. Private-sector employment dropped by 53,000 (-0.4%), its first decline since February. A softer labor market could prompt the BoC to cut rates to support economic activity and hiring, lowering yields on Canadian assets. However, Canada’s GDP grew 0.8% in Q2 2026, following a 0.1% expansion in Q1. Meanwhile, recent global equity losses boosted demand for safe-haven government bonds. The Democrats won majorities in both chambers of the US Congress in the midterm elections, fueling concerns over tighter AI infrastructure regulations, prompting a rout in equities.

Canada’s 10-year government bond yield hovered around 3.68% in November, remaining near its lowest level in two months, as mounting global equity losses boosted demand for safe-haven government bonds. Democrats won majorities in both chambers of the US Congress in the midterm elections, fueling concerns over tighter AI infrastructure regulations. Markets are also cautious ahead of employment reports from Canada and the US. Canadian employment is expected to rise by 13.6 thousand in October, following a 68.3 thousand decline in September, the steepest drop in seven months and well below expectations for a 7 thousand increase. The data may offer clues on the BoC’s policy outlook. At its latest meeting, the BoC raised rates by 25 bps to 2.5%, its first hike since 2023, as expected. Policymakers also raised their inflation and growth forecasts. Annual inflation reached 3.1% in September, its highest since May’s 3.2%, but below the 3.2% forecast.