The Canadian bond markets resumed trading on Friday after observing Remembrance Day. Bond prices held gains despite the US retail sales data that suggested some underlying strength. The two-year bond gained three Canadian cents to C$99.87 to yield 3.316 percent, while the 10-year bond advanced 21 Canadian cents to C$103.66 to yield 4.522 percent. There have been some rumblings in the market that the Bank of Canada may pause in its rate hike campaign early next year, keeping bond prices supported.
The central bank has raised interest rates in each of the past two months and is expected to do so again in December. But the pace of hikes after that is up for debate, particularly with the surging Canadian dollar.
The yield spread between the two-year and 10-year bond moved to 120.7 basis points from 121.8 at the previous close.
The 30-year bond, due 2029, gained 35 Canadian cents to C$110.55 to yield 4.998 percent. In the United States, the 30-year treasury yielded 4.95 percent.
The three-month when-issued T-bill yielded 2.69 percent, down from 2.7 percent from the previous close.