Canada’s 10-year government bond yield dropped to around 3.80% in October, marking its lowest level in five weeks. This decline mirrored a broader global trend as investors sought safety in government bonds amid a selloff in technology and AI stocks.
The shift toward safe-haven assets was driven by concerns over the long-term viability of AI spending in a high-interest-rate environment. This cautious sentiment contrasted with recent economic data from Canada, which showed a significant rebound in manufacturing sales.
Canadian manufacturing sales surged 1.5% month-over-month to C$79.9 billion in August 2026, exceeding expectations of a 1.1% increase. This marked the largest rise since April and fueled speculation that the Bank of Canada might raise interest rates at its next meeting.
However, the positive manufacturing data was tempered by weaker employment figures. The country saw a decline of 68,300 jobs, far below forecasts for a 7,000 increase, suggesting a slower start to the third quarter.