FX.co ★ Canadian 10-Year Yield Eases to 2-Month Low

Canada’s 10-year government bond yield slipped to around 3.68%, its lowest level in more than two months, in line with a broader decline in global bond yields. The move reflected a wider risk-off mood in financial markets, which also sparked a renewed global sell-off in technology stocks as investors assessed the potential impact of a Democratic victory in the United States on the technology sector and AI-related capital spending. Democratic gains could also reinforce efforts to challenge President Trump’s trade policies, with possible implications for Canada.

Meanwhile, the Bank of Canada (BoC) delivered its first interest rate hike in more than three years in October, as widely anticipated. The central bank indicated that further increases may be needed to prevent higher energy costs from feeding into broader inflation. It also raised its 2027 inflation forecast to 3.1%, from 2.0% in July, and upgraded its growth outlook to 1.0%, from 0.7%. Even after the latest hike, the policy rate remains below the estimated neutral level.