The Canadian bond prices were mixed on Friday in volatile trading as stock markets rallied late in the session, causing the bond market to unwind a safe-haven bid. The Canadian job numbers also played a role in the mixed results, as they lessened the likelihood of a Bank of Canada interest rate cut in 2008, said Sheldon Dong, fixed income strategist at TD Securities.
"Basically, people probably got too bullish at the front end of the curve and they're sort of unwinding that trade, so that's why the short-end yields have backed up a bit," he said. Canadian 30-year government bond prices rose, pushing yields to an all time low. Bond yields and prices move in opposite directions.
The two-year bond dropped 4 Canadian cents to C$100.09 to yield 2.708 percent, while the 10-year gained 3 Canadian cents to C$106.58 to yield 3.447 percent. The yield spread between the two-year and 10-year bond was 76.0 basis points, down from 77.0 basis points at the previous close.
The 30-year bond added 39 Canadian cents to C$118.24 for an all-time low yield of 3.934 percent. In the United States, the 30-year Treasury yielded 4.274 percent. The three-month when-issued T-bill yielded 2.40 percent, down from 2.43 percent at the previous close.
Comments
Comments are closed.