The yield on Canada’s 10 year government bond was around 3.4%, holding below its highest since August of 3.47% reached on December 22nd, as slower growth signals, Bank of Canada policy caution, and softer global rate expectations weighed on longer maturities. Recent data point to a loss of economic momentum toward the end of 2025, with forecasts suggesting a modest contraction in October GDP alongside broader signs of weakness in activity indicators. Investors read recent Bank of Canada communications as noncommittal on further tightening, with an increasing bias toward holding rates steady or potentially cutting next year, reinforcing downward pressure on long term yields as expectations for additional hikes fade. Elsewhere, US Treasury yields have also declined amid holiday thinned trading, as markets price in rate cuts next year, with investors broadly expecting two reductions in 2026 despite a more divided Federal Reserve outlook that centers on only one.