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Canadian bond yields ease after tame US inflation data
Canada's 10-year bond yield fell 2.3 basis points to 3.685% on Wednesday, retreating from a two-year high of 3.755% touched the previous day. The move followed US data showing consumer prices barely…
The Story in Brief
Canada's 10-year bond yield fell 2.3 basis points to 3.685% on Wednesday, retreating from a two-year high of 3.755% touched the previous day. The move followed US data showing consumer prices barely rose in July, reducing the chance of a Federal Reserve rate hike next month. The Canadian dollar held near a two-month high against the greenback, trading 0.1% weaker at 1.3940 per US dollar.
Domestic data showed building permits rebounded 18.5% in June after two months of decline. Over the past month, Canada's 10-year yield has climbed about 17 basis points, the most among G7 sovereign debt, as jobs, trade and GDP data pointed to economic recovery. Meanwhile, oil prices edged lower to $83.11 a barrel amid reduced demand forecasts and Middle East tensions.
The Indian Opinion
The narrative that global interest rates are on a one-way rise ignores the nuance of tame US inflation and Canada's mixed data. While Canada's recent economic indicators have outperformed peers, the pullback in bond yields shows markets are not betting on aggressive tightening. The true test will come with Canada's next GDP and jobs numbers later this quarter, will domestic strength persist enough to force the Bank of Canada's hand, or will cautious Fed policy keep yields capped?
Source: livemint.com
This story was synthesised by AI from the source linked above.
