FX.co ★ Canada 10-Year Bond Yield Pulls Back

Canada's 10-year government bond yield eased to 3.52% from the six-week high of 3.59% reached on July 8th, as signs of moderating energy inflation reduced the likelihood of a Bank of Canada rate hike. Crude oil prices fell amid indications that diplomatic efforts between the US and Iran remain on track despite recent tensions. Even so, the 10-year yield was still up 12 basis points since the start of the month, reflecting ongoing concerns over potential supply disruptions and higher energy prices. At the same time, Canada’s labor market continued to demonstrate strength, with employment rising by 18,200 in June following an 88,000 gain in May, while the unemployment rate unexpectedly matched its lowest level in nearly two years. Investors widely expect the central bank to keep its policy rate unchanged at its July 15th meeting.