The 10-year Canadian government yield climbed past 3.18%, a one-month high, as markets shifted from pricing imminent cuts to expecting a longer pause in easing. October’s labour surprise tightened the policy outlook with the unemployment rate falling to 6.9% from 7.1% and national employment up about 66,600, while wage growth accelerated to roughly 4%, readings that raise the odds of rates staying higher for longer. The Bank of Canada reinforced that stance by stressing the need to keep policy at a contractionary level until inflation is clearly back to target as the BoC’s trimmed-mean core gauge moved to its highest level since February 2024, which pushed up expected real rates. At the same time Ottawa’s much wider fiscal deficit raised the prospect of heavier sovereign issuance and a larger supply premium on long-dated paper. Externally, US Treasury yields firmed after progress on shutdown talks and mixed data.