Monthly report
Canadian bonds boosted by faster BoC easing
Central bank easing and lower inflation lifted global bond markets in Q3. Canadian conventionals gained 3-6%, while some unwinding of the yen carry trade converted modest JGB returns into strong returns of up to 14% in CAD. Euro and sterling strength boosted Bunds and gilt returns. Strong gold performance highlights rising uncertainty and risks.
Key highlights:
- Macro and policy backdrop – BoC moves on growth concerns
- Canadian governments – Canadian yield curve normalises after three BoC cuts
- Canadian credit – Canadian corporates have recovered since Covid
- Global yields and spreads – Bull steepening continues
- Sovereign and climate bonds – Recent slow erosion of the SI-premium may be ending?
- Performance – Long Canadian conventionals outperform real return peers
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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