Canada's February 2027 Bond Draws Attention Amid Elevated Short-Term Yields

The Government of Canada's 3.0% bond maturing on February 1, 2027 has drawn attention from investors due to its proximity to maturity and elevated short-term yields.

The bond, with ISIN CA135087S547, carries a fixed coupon of 3.0% and sits near the two-year point on the yield curve.

Its market price of 100.14% of face value has converged towards the 100 it will pay at redemption, known as the pull to par, which is why a bond that trades above face value can still offer a yield to maturity below its coupon.

The Bank of Canada's policy rate remains at 2.25%, and headline inflation lingers at 3.0%, keeping front-end yields firm.