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2026-05-26 21:29:40
[Canadian 10-year government bond yield falls to 3.45% from two-year high] ⑴ The yield on Canadian 10-year government bonds fell to 3.45%, retreating from a two-year high of 3.7% reached on May 19, following the trend of US Treasuries, as a pullback in energy prices dampened the prospect of soaring inflation. ⑵ The US and Iran hinted at being closer to an agreement to end the conflict and restore energy supplies to the region. Although the new strikes dampened optimism about an agreement, the decline in energy costs is consistent with the Bank of Canada's signal that it believes high energy prices will not spill over into inflation in core economic sectors. ⑶ The latest inflation report showed that the Bank of Canada's preferred core inflation gauge slowed more than expected, falling to its lowest level in five years. Meanwhile, the expected flat GDP in the first quarter also provided some support for interest rate cuts.
