Canada: 10-Year Yield Edges Higher on BoC Rate Hike Bets.

Canada’s 10-year government bond yield edged higher to around 3.85% in October as expectations for Bank of Canada policy shifted toward tighter monetary conditions. Markets anticipate a more hawkish tone at the BoC’s next policy decision, scheduled for October 28. Governor Tiff Macklem recently said the central bank expects to significantly raise its quarterly inflation forecast this month, following hawkish remarks last week about energy-driven price pressures. Rising oil prices have added to upward pressure on energy costs amid the escalation of the conflict in the Middle East. Meanwhile, Canadian retail sales are expected to have increased 0.7% month over month in September, extending a 1.2% gain in August, according to preliminary estimates. Stronger retail activity could add to inflation concerns and reinforce expectations for a tighter monetary policy stance.