The yield on Canada’s 10 year government bond surged past 3.4% to its highest level since early September as markets repriced the path for interest rates after a stronger than expected employment report. Unemployment unexpectedly fell to 6.5% in November to the lowest in 16 months and the number of unemployed dropped by about 80,000 to roughly 1.5 million, a meaningful shrinkage of slack that raises the probability the Bank of Canada will pause further easing. Bank of Canada communications since the October cut have signalled the end of an active easing cycle and reinforced a data driven approach and will stop easing if activity and inflation prove firmer than expected.