The Canadian bond prices ended mixed on Friday with gains coming on the long end of the curve alongside the rally in the bigger US Treasury market after a report there showed the US economy shrank at its fastest pace in nearly 27 years. But the retreat was not as deep as analysts had expected.
"Initial optimism from the US report quickly dissipated as expectations started to build that the unexpected strength we saw in Q4 would likely get reversed in Q1," said Paul Ferley, assistant chief economist at Royal Bank of Canada. But nagging concerns over swelling supply tied to deficits in both Canada and the United States, pressured bond prices on the short end of the curve.
The two-year bond fell 4 Canadian cents to C$102.39 to yield 1.421 percent, while the 10-year bond climbed 17 Canadian cents to C$109.57 to yield 3.062 percent. The 30-year bond rose 80 Canadian cents to C$121.30 to yield 3.770 percent. In the United States, the 30-year treasury yielded 3.602.