The Canadian bond prices rallied on Friday along with the larger US market as a race out of equities benefited bonds while investors sought the safety of government debt amid warnings of losses at financial institutions.
North American stock markets tumbled on Friday, with the Toronto Stock Exchange closing 258 points lower and the Dow Jones industrial average ending down 223 points. The fall in equity markets was sparked in part by worries over more US credit losses.
The two-year bond rose 9 Canadian cents to C$100.65 to yield 3.915 percent, while the 10-year bond climbed 41 Canadian cent to C$98.36 to yield 4.210 percent. The yield spread between the two-year and 10-year bond moved to 29.5 basis points from 31.2 at the previous close.
The 30-year bond added 74 Canadian cents to C$111.29 to yield 4.319 percent. In the United States, the 30-year treasury yielded 4.593 percent. The three-month when-issued T-bill yielded 3.99 percent, down from 4.03 percent at the previous close. The Canadian dollar fell against the US currency for a third straight session on Friday, its latest drop coming after weak domestic trade surplus data.
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