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. Gold and the Canadian dollar repriced sharply on the same surprise, while equity volatility barely moved, extending the anchoring pattern the VIX has shown through weeks of tariff and Iran-related headlines. The divergence shows Canadian long-duration yields currently tracking the US inflation path more closely than Canada's own tariff dispute.
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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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Gold rallied and gold miner shares carried the TSX higher, while Brent ended the month close to where it began.
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