Canadian Bond Yields Fall as Global Markets Rally

Canada's 10-year government bond yield fell on Monday as global bond markets rallied. The Canadian benchmark yield was last at 3.830%, down 4.8 basis points from the previous day.

The decline in yields came as investors found some relief after recent pressure on long-term U.S. Treasury yields eased. Bank of Canada Governor Tiff Macklem said new U.S. tariffs could push Canada's fourth-quarter growth below 1%.

Senior Portfolio Manager at Hilbert Group, Jesse Marre, noted that the market began to believe the Fed's resolve in containing inflation after long-end Treasury yields stabilized. The significant relief was seen as a drop in ten-year yields from around 5.02% to 4.95%, with the curve flattening.

Markets remain caught between weaker growth and renewed inflation risks, which could limit the fall in bond yields. Canadian bonds face competing forces at home, including trade uncertainty and higher oil prices linked to the Middle East conflict.