Monthly report
Canadian bonds gain as BoC eases again
Another rate cut from the BoC revived Canadian government and credit bond performance in July, with gains observed along the entire curve. Excess supply in the economy prompted the BoC to cut rates for a second time since June, while sticky services inflation continues to delay the Fed’s move. Provis recovered and outperformed.
Key highlights:
- Macro and policy backdrop – BoC moves to ease again, as activity weakens
- Canadian governments – The dis-inversion in the Canadian yield curve continues
- Canadian credit – Canadian investors lured back to BBBs and HY in July
- Global yields and spreads – Breakevens move pro-cyclically with rate expectations
- Sovereign and climate bonds – Green sovereigns’ duration was helpful
- Performance – Bond rally driven by rate cuts and currency moves
This report provides actionable insights on currency-adjusted performance, macro drivers, shifts in yields, spreads and curves across conventional, inflation-linked and corporate bonds within the Canadian fixed income market.
For specialist content on a range of investment topics, including macroeconomic analysis and how it affects market performance and multi-asset analysis, viewed through our indices and data, explore our Global Investment Research hub.
