The Canadian bond prices rose modestly on the jobs data on Friday, sharply underperforming US treasuries, which surged on expectations of a rate pause next week. The US outperformance meant that US-Canada yield spreads declined moderately.
Somewhat offsetting the negative jobs report was a better than expected Ivey Purchasing Managers Index for July.
The index, which measures purchasing activity at Canadian companies, slipped to 60.1 in July from 62.0 in June, indicating that purchasing activity expanded, but at a slightly slower pace than in the previous month. Analysts had expected a result in the low 50s.
The two-year bond rose 4 Canadian cents to C$99.32 to yield 4.140 percent, while the 10-year bond climbed 23 Canadian cents at C$101.42 to yield 4.304 percent.
The yield spread between the two-year and 10-year bond was 16.4 basis points, down from 17.5 at the previous close.
The 30-year bond increased 30 Canadian cents to C$121.58 to yield 4.374 percent. In the United States, the 30-year treasury yielded 4.994 percent.
The three-month when-issued T-bill yielded 4.17 percent, down from the 4.18 at the previous close.