Canada Bond Yields Rise as Inflation and Oil Prices Weigh

Canada's 10-year government bond yield rose on Monday as investors weighed persistent inflation pressures and higher oil prices. The data showed annual consumer inflation held at the top of the Bank of Canada's target range, with a 3% rate in August.

The key concern is that higher oil prices could feed through to broader inflation in coming months, particularly after Brent crude climbed above $100 a barrel. This has added sensitivity to government bond yields as markets assess how long the central bank may need to keep policy restrictive.

The Bank of Canada has kept its policy rate at 2.25%, warning that a sustained rise in inflation could force it to raise rates. Canadian bond yields have already moved sharply higher in September, with the 10-year yield standing at about 3.94% at Friday's close.