Investing.com — Canadian government bond yields fell on Tuesday, tracking a broader retreat in global yields as easing oil prices reduced some pressure on inflation expectations and risk sentiment improved.
The decline came as investors responded to signs that crude supply from the Middle East was recovering, while the Group of Seven’s plans to release emergency fuel reserves also helped ease concerns about an extended energy shock.
The benchmark two-year Canada yield was last at 3.235%, down 1.8 basis points, or 0.55%, from the previous level. The 10-year yield fell 3.2 basis points to 3.920%, according to the latest market data.
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The move followed a broader easing in global bond yields. U.S. Treasury yields declined on Tuesday as oil prices retreated, helping reduce immediate concerns that higher energy costs would fuel inflation and force central banks to keep interest rates higher for longer.
Oil prices fell nearly 2% as traders took some comfort from stronger Middle Eastern exports and the G7’s emergency stockpile plans. Brent crude was last around $98.48 a barrel, while U.S. West Texas Intermediate stood near $88.01.
Canada’s bond market also remains sensitive to domestic economic data and trade developments. Earlier on Tuesday, data showed Canada’s August trade surplus widened sharply to C$4.2 billion, well above economists’ expectations, as exports to the United States jumped ahead of the latest U.S. tariffs.
The decline in Canadian yields leaves the curve relatively steep, with the 10-year yield still about 68.5 basis points above the two-year yield, reflecting a sizeable term premium and expectations around longer-term inflation, growth and government borrowing. The Bank of Canada identifies the two- and 10-year Government of Canada securities as key benchmark yields for the market.
Original Article
Canada bond yields fall as global rate pressures ease
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