FX.co ★ Canada 10-Year Bond Yield Hits 12-Week Low

Canada’s 10-year government bond yield slipped below 3.2%, reaching a 12-week low as investors weighed a turbulent U.S. trade backdrop against signs of easing domestic inflation. Markets were pulled in opposite directions by the U.S. Supreme Court’s rejection of expansive presidential tariff powers and President Trump’s subsequent move to impose a 15% global surcharge under Section 122. The resulting North American bond rally has tracked the decline in the U.S. 10-year Treasury yield, as traders recalibrate expectations following the administration’s weekend hike in levy rates. On the domestic front, supportive data have reinforced the downward move in yields: January inflation slowed to 2.3%, and the Bank of Canada held its policy rate at 2.25%, helping to flatten the long end of the yield curve. Ongoing trade headwinds are evident in Canada’s record $31.3 billion annual trade deficit, though recent strength in gold and crude oil prices, with oil hovering near $66, has helped cushion the impact on overall demand for Canadian sovereign debt.