Canadian bond prices climbed strongly across the curve, mimicking US Treasuries, on talk that prospects of slow growth and low inflation could lead the US Federal Reserve to become more accommodative. The Canadian two-year bond drove 15 Canadian cents higher to yield 1.459 percent, while the 10-year bond added 40 Canadian cents to yield 3.113 percent.
"You'd already seen a pretty sizeable rally, people are still keying off of the Fed President Bullard's quantitative easing comments yesterday but it seems to me that you've got a bit of an extra kick from the numbers this morning," said Eric Lascelles, chief macro strategist at TD Securities.
On Thursday, St. Louis Federal Reserve Bank President James Bullard added to fears about the economy by saying he was worried about the risk the United States might fall into a Japan-style quagmire of falling prices and investment, comments the drove stocks and other riskier assets to retreat. Most Canadian financial markets are closed on Monday for a public holiday.