Canadian Bond Yield Falls as Jobs Data Undercuts Rate-Cut Hopes

The Canadian 10-year government bond yield fell to 3.775% on Friday after Statistics Canada reported a weaker-than-expected domestic jobs report. The unemployment rate held steady at 6.4%, but the economy lost 41,700 jobs in August, sharply reversing strong hiring earlier in the summer.

The data reinforced expectations that the Bank of Canada can remain cautious on interest rates as the economy loses momentum. In contrast, US Treasury yields rose to 4.7862% after stronger-than-expected US employment data was released.

Canadian yields had been elevated ahead of Friday's report, and the move suggests that domestic labor-market signals are currently outweighing upward pressure from US yields.