Canada's 10-year government bond yield climbed to 3.75%, its highest level since May 2024, even though the Bank of Canada has held its policy rate steady for six consecutive meetings. The move tracks US Treasury yields, which rose on oil-driven inflation concern tied to the Strait of Hormuz conflict, since global investors price Canadian and US government debt off similar inflation expectations. Underneath that imported pressure, Canada's own economy sent a stronger signal: July employment rose by 75,100 and second-quarter GDP grew at an annualized 3.4%, both well above forecasts.
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Wednesday afternoon's hot US July PCE inflation print, which came in above forecast, reversed four sessions of falling Canadian and US bond yields within hours.
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Scotiabank, BMO, and National Bank each posted accelerating year-over-year adjusted net income growth this week, with each report topping the one before it.
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Brent was the only one of the three to finish above its starting level, while the index and gold both fell.
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The Bank of Canada held its policy rate at 2.25% for a seventh straight time, yet Canadian yields rose as United States yields surged.
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The index fell for the month even though Brent crude gained and the Strait of Hormuz stayed shut, because rising United States bond yields outweighed oil and gold.
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Canadian yields drifted higher through August even though the Bank of Canada held its policy rate at 2.25% and had no decision to make during the month.
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