Canadian bond yields were marginally down on Friday, July 14, 2017 with the 5-year note down by 1.24 percent at 1.519 and 10-year down by 0.63 percent at 1.898.
Earlier this week Bank of Canada raised its prime interest rate to 0.75 percent from 0.50 percent after a long time. The move sent the Canadian dollar surging for the day to its highest in more than a year and the 10-year yield was seen at its highest intraday level since December 2014 at 1.927 percent.
The last time the yield price went above 10, was back in March 1985 when it touched an all-time high of 12.44 and a record low of 0.95 in September 2016.
When bond yields go up, bond prices go down and the demand for bonds goes down. A bond’s yield moves inversely to its price. This is also the time when the stock market mostly goes up as investors tend to move to the greener side.
TheS&P/TSX Composite index was up by 48.67 points, or 0.32 percent at 15,183.79
For the past two months, yield prices are going through ups and down but mostly going in an upper direction which might mean additional risk
This week, yields rose across maturities and the 2-year government yield was at its highest since 2013, pushing the bond prices to sink.
