The Canadian bond prices were down on Friday ahead of the GDP data and remained lower as the report came in stronger than analysts expected. The data is expected to complicate the Bank of Canada's rate decision as it considers whether to cut rates because of signs that the lofty Canadian dollar is hurting exports.
The GDP data also followed a string of weak economic data that amplified concerns about the effects of a strong currency and the US economic slowdown on Canadian manufacturers. The two-year bond fell 1 Canadian cent to C$101.12 to yield 3.659 percent.
The 10-year bond fell 6 Canadian cents to C$100.16 to yield 3.980 percent. The yield spread between the two-year and 10-year bond moved to 32.1 basis points from 30.9 basis points at the previous close.
The 30-year bond dropped 13 Canadian cents to C$114.44 to yield 4.147 percent. In the United States, the 30-year Treasury yielded 4.383 percent. The three-month when-issued T-bill yielded 3.92 percent, down from 3.95 percent at the previous close.
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