Canadian Bonds Higher Ahead of U.S, Canada Jobs Data

 
   


By David George-Cosh 
 

        TORONTO--Canadian bonds were mostly higher Thursday as a drop in equities and lower oil prices led investors to pursue fixed-income assets ahead of the release of key labor data.
        Canada's two-year bond yield was at 0.438% Thursday, down from 0.440% late Wednesday, according to electronic trading platform CanDeal. The 10-year bond yield was at 1.449%, down from 1.471%. Bond yields move inversely to prices.
        There were no domestic economic releases Thursday, leaving the Canadian bond market to move in sympathy with its U.S. peers.
        Oil prices moved lower Thursday, hitting new multimonth lows, as persistent oversupply and high production weighed on investor sentiment.
        Meanwhile, U.S. jobless claims rose by 3,000 to a seasonally adjusted 270,000 in the week ended Aug. 1. The figure was slightly below the 271,000 new applications for jobless benefits economists expected.
        Canada's bond market will be tuned to Friday's release of U.S. and Canadian job figures. Economists expect Friday's nonfarm payrolls report to show that the U.S. economy added 215,000 new jobs in July, while Canada is forecast to gain just 5,000.
        TD Securities said an above-consensus Canadian jobs figure will weigh somewhat on Canada's bond market, but it is likely that fixed-income will be more sensitive to U.S. nonfarms payroll data.
        "The U.S. payrolls data will be the more important release for the direction in bond markets, but assuming an on consensus number there we should see Canada-U.S. spreads move higher for 2s and 5s with 5s10s flattening in Canada," TD said.
        Write to David George-Cosh at david.george-cosh@wsj.com
        (END) Dow Jones Newswires

        August 06, 2015 16:42 ET (20:42 GMT)

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