Monthly report
Firmer growth and BoC hold weigh on Canadian longs
Equity market sentiment remained positive in July, after US trade deals with Japan and the Eurozone. The policy uncertainty index fell sharply as a result, but gold stayed close to historical highs, reflecting its broader portfolio role. Canadian growth remained resilient, and underlying inflation is a concern, pushing long Canadian bond yields higher.
Key highlights:
- Macro and policy backdrop – Canadian economy defies tariff uncertainty, so far
- Canadian governments – Higher underlying inflation pushes up breakevens
- Canadian credit – BBB spreads tighten less
- Global yields and spreads – Steepening trend intact. US sovereign spreads stabilise
- SI bond analysis – Green sovereigns tilt further towards EUR
- Performance – Both IG and HY credits survived the tariff turmoil
From October 2025, we will be combining the US Fixed Income Insights and Canada Fixed Income Insights reports into a consolidated North America Fixed Income Insights edition. The new monthly North America edition will analyse the Global and North American macro backdrop and cover the latest developments in the US and Canadian sovereign bonds and credit markets.
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.
