Canadian bond prices were firmer across the curve after the domestic jobs data, which added to recent evidence that the country's recovery is starting to slow. Softer US equities also contributed to investors favouring the safety of government bonds. Analysts said the Canadian job figures should keep the Bank of Canada on track for a quarter-point interest rate rise on September 8, to follow two hikes of the same size in the past two months.
But market pricing, as measured by yields on overnight index swaps, fell to around 59 percent chance of a rate increase, compared with about 68 percent before the jobs report. The US jobs data will likely keep debate alive on whether more easing is needed there. The next US Federal Reserve policy-setting meeting is on Tuesday. The two-year bond was up 15 Canadian cents to yield 1.442 percent, while the 10-year bond gained 43 Canadian cents to yield 3.074 percent.