Canada 10-Year Bond Yield Rises to 2-Week Highs

The yield on the Canadian 10-year government bond climbed above 3.44% in August to a two-week high as US yields moved higher after hotter-than-expected producer prices, reducing urgency for near-term Fed cuts. Domestically, June activity came in firmer than feared, manufacturing sales rose 0.3% on petroleum, coal and food, while wholesale trade climbed 0.7% to C$84.7 billion, which argues against an imminent growth stall. Inflation is cooler but not “mission accomplished” as the BoC’s preferred inflation gauge, the trimmed mean, stalled at a still-elevated 3% in June, leaving the Bank of Canada little incentive to accelerate cuts. The Bank’s July decision and minutes reinforced that stance. It trimmed the policy rate to 2.75% but vowed to proceed carefully given persistent service-price inertia and the need to assess opposing forces from tariffs and cooling demand, prompting investors to reprice longer-term yields upward.