Canadian Bond Market Sees Second Consecutive Day of Price Lifting

The Canadian bond market showed signs of improvement as prices rose for the second day in a row, attributed to a strengthening Canadian dollar and improving market sentiment. Traders pushed prices 25 to 70 cents higher, with some bonds increasing by as much as 60 cents. The 8-per-cent Canada bond saw its price rise to 92.55, and its yield fell to 8.71 per cent. Experts caution that it remains to be seen whether this trend will continue or if it is just a bear market rally.

Key Takeaways:

• The Canadian dollar rose 0.29 cents (U.S.) on top of Friday's 0.43-cent gain, pushing Canadian bond prices higher.
• Prices rose 25 to 70 cents (Canadian) across various bonds, with the 8-per-cent Canada bond increasing by 60 cents.
• The 8-per-cent Canada bond's yield fell to 8.71 per cent from 8.77 per cent.
• Experts are cautious, noting that "the only long-range hurdle is the Quebec election later this summer."
• The Province of Ontario issued $600-million of 10-year bonds priced at 99.15 to yield 9.126 per cent.
• The U.S. bond market chalked up another winning session, with the 6.25-per-cent 30-year U.S. Treasury bonds climbing 56 cents (U.S.) to 88 1/4.

Statistics:

• The Canadian dollar traded at 72.87 cents (U.S.) late in the day on North American markets.
• The 8-per-cent Canada bond increased 60 cents (Canadian) to 92.55.
• The yield on the 8-per-cent Canada bond fell to 8.71 per cent from 8.77 per cent.
• The Province of Ontario's 10-year bonds were priced at 99.15.
• The U.S. 6.25-per-cent 30-year Treasury bonds climbed 56 cents (U.S.) to 88 1/4.

Sources:

• "U.S. Bond Market Chalks Up Another Winning Session" (exact source not provided)
• "Canada Bond Prices Rise as Dollar Strengthens" (exact source not provided)
• "Canadian Bond Market Brief" (exact source not provided)
• Specific Canadian bond prices and yields (exact sources RBC Dominion Securities)
• U.S. Treasury bond prices and yields (exact source Benchmark International Bonds)