Monthly report
Canadian bonds gain, as BoC eases again
Global government bond yields ended January at similar levels as they had started, though masking sharp intra-month fluctuations, as markets absorbed new Trump policy proposals, including higher trade tariffs. Currency gains versus the Canadian dollar contributed to EM bond outperformance in January, while high yield credit also benefitted from the equity rally.
Key highlights:
- Macro and policy backdrop – The BoC proceeded with expected 25bp cut
- Canadian governments – Flatter Canadian yield curve in January
- Canadian credit – More spread tightening?
- Global yields and spreads – Sticky US inflation drove higher breakevens?
- Sovereign and climate bonds – Quality bias in SI indices
- Performance – Easing prospects lift returns in January
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.
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