The yield on Canada’s 10-year government bond fell toward 3.44% on Monday as cooling domestic inflation and signs of economic slack reinforced expectations for a stable Bank of Canada policy path. Headline inflation decelerated more than anticipated to 1.8% in February which marks the softest rate since last summer and brings price growth back in line with the midpoint of the central bank target. This disinflationary trend follows a sharp contraction in the domestic labor market where the unemployment rate rose to 6.7% alongside a loss of 83,900 jobs. While global energy prices remain a risk factor the yield is retreating from July highs as investors prioritize evidence of a widening output gap over Middle Eastern supply concerns. Markets are now pricing in a cautious stance from the Bank of Canada ahead of its March 18 meeting with the 10-year benchmark finding support from a broader easing in global Treasury yields.