Canada 10-Year Bond Yield Slips Amid Trade War
The yield on Canada's 10-year government bond declined to below 3.09%, nearing the two-year low of 2.83% recorded on March 3rd. This movement is driven by escalating trade conflict tensions and stagnant GDP data, prompting the Bank of Canada to consider continuing its rate-cutting strategy. The looming threat of U.S. tariffs on critical Canadian export sectors has previously led the BoC to indicate its willingness to reduce borrowing rates further to mitigate tariff effects and encourage economic growth. In a related development, Prime Minister Mark Carney has cautioned that Canada is prepared to implement its own trade measures in retaliation, potentially escalating the trade dispute. This cautionary environment is exacerbated by initial reports showing that Canadian GDP remained nearly flat in February, heightening concerns about a potential economic slowdown. As a result, investors are increasingly turning to government bonds as a safe haven, pushing yields even lower amidst this uncertain climate.
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