The Canadian bond prices soared on the disappointing jobs reports on Friday, although one analyst said the weak numbers did not affect the near-term interest rate outlook significantly. Canadian bond prices surged as soft US jobs data eased concerns that inflation pressures would drive the US Federal Reserve to keep raising interest rates into the second half of the year.
US non-farm payrolls rose by 146,000 in January, below consensus market forecasts of 190,000, while December's jobs gain was lowered by 24,000 to 133,000.
While the Canadian data also missed the mark, analysts said it was the US report that drove most of the price gains.
"Initially we rallied a bit with Canada's numbers, but then it was basically just catch-up after the US matched the disappointing performance," said Mark Chandler, senior economist at Scotia Capital.
The Canadian data reinforced the notion that Bank of Canada interest rates will be on hold for the foreseeable future.
Analysts still expect the Fed to keep raising rates over the next few months.
The two-year bond gained 14 Canadian cents to C$100.66 to yield 2.875 percent, while the 10-year bond soared 70 Canadian cents to C$106.31 to yield 4.175 percent.
The yield spread between the two-year and 10-year bond moved to 130.0 basis points from 131.0 at the previous close.
The 30-year bond, due 2029, surged C$1.45 to C$116.85 to yield 4.671 percent. In the United States, the 30-year treasury yielded 4.483 percent.
The three-month when-issued T-bill yielded 2.44 percent, down from 2.46 percent at the previous close.
The Canadian dollar finished at a 3-1/2 month low versus the US currency on Friday as greenback-friendly remarks by US Federal Reserve Chairman Alan Greenspan stole the spotlight from weak Canadian and US jobs data.
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