The yield on Canada’s 10-year government bond has risen to over 3.2% in October, marking the highest level in more than two months. This increase aligns with a surge in US yields, driven by a series of strong economic data that suggest a less-dovish outlook from major North American central banks.
In Stember, Canada's Ivey PMI experienced a notable rebound, climbing to 53.1 from August's 48.2, which rresented a three-and-a-half-year low. This performance exceeded the anticipated 50.2 and is indicative of renewed economic growth.
In the United States, labor data that surpassed expectations has diminished the likelihood of aggressive Federal Reserve rate cuts, further fostering optimism for a soft landing in the economy. Additionally, strong ISM services activity paired with rising prices has reinforced a hawkish stance on monetary policy by the Federal Reserve, contributing to the increase in bond yields.
As of October 7, the Canada 10-Year Bond Yield stood at 3.28 percent, based on over-the-counter interbank yield quotes. Projections indicate the yield is expected to trade at 2.87 percent by the end of this quarter, with further estimates suggesting a decline to 2.67 percent in one year.