Canada’s 10-year government bond yield climbed to 3.76%, its highest level since April 2024, as a global selloff in sovereign debt drove long-term borrowing costs in advanced economies to multiyear highs. The move mirrored the rise in US Treasury yields, which rebounded after earlier declines sparked by the US Treasury Department’s announcement of an expanded bond buyback program.
Global yields had already been under upward pressure from higher US Treasury rates, with increased credit supply and persistent inflation risks prompting investors to shun longer-dated bonds. Oil prices remained elevated near multi-month highs, further stoking inflation concerns.
Domestic data, however, sent mixed signals. Weaker-than-expected retail sales pointed to softer consumer spending, reinforcing expectations that the Bank of Canada will leave interest rates unchanged next week. At the same time, stronger-than-anticipated factory sales and a resilient labor market offset some of that weakness. The economy is estimated to have grown at an annualized 3.4% in the second quarter of 2026, exceeding the BoC’s 2.5% forecast.