Canadian bonds retraced most of their gains late Tuesday, finishing the session mixed after demand for fixed income fizzled toward the end of the day.
Yields for the two-year bond were at on 1.279% late Tuesday, unchanged from late Monday, while the 10-year bond was yielding 2.268%, from 2.274%, according to data provider CQG.
Yields for the 30-year bond were at 2.802% on Tuesday, from 2.800% late Monday.
Bond prices move inversely to bond yields.
Canadian bonds continued to take cues from its U.S. counterparts. As bids for 10-year U.S. Treasurys eased in the afternoon, the rally in Canadian fixed-income also lost steam. The result was a choppy market where Canadian bonds "outperformed the US in the front end and were underperforming in the back end," said Ian Pollick, senior fixed income strategist at RBC Capital Markets in Toronto.
"It's really been a day of two halves where we saw a rally in the morning and a moderate sell-off in the afternoon," Pollick said.
Pollick added that Wednesday will see the last supply of 30-year bonds for the fiscal year and if the government maintains the same auction schedule as last year with the next issuance coming in June, "it could scare people out of the market."
Canadian bonds rallied earlier on Tuesday after fresh concerns about China's growth mounted during the overnight session, pushing investors to move money into safer assets.
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