By David George-Cosh
TORONTO-- Canadian government bonds were modestly lower on Tuesday, as
the positive news of a plan for recapitalizing Spain's banking system
provided investors with some relief in a quiet trading session.
News of the bailout encouraged investors to move into more
risk-sensitive assets such as equities and out of the relative safety
of bonds.
The 10-year bond was yielding 1.667% Tuesday, from 1.662% late Monday,
according to electronic bond trading platform CanDeal. Yields for
Canada's two-year bond were at 0.969%, from 0.957% while the 30-year
bond was yielding 2.277%, from 2.273%.
Bond yields move inversely to bond prices.
Canadian government bonds were modestly underperforming their U.S.
counterparts in the short end of the yield curve ahead of a $32
billion sale of new three-year U.S. Treasury notes.
Some jitters emerged in Europe when Italy's Prime Minister Mario Monti
said it was possible for the country to tap the euro zone's bond
support mechanism, taking a bit of steam away from the earlier
announcement by European Union policymakers that they had reached an
agreement to recapitalize Spain's banking system.
During the overnight session, bond markets were supported by weak
Chinese trade surplus data that showed that import growth slowed more
than expected, but that sentiment faded away at the beginning of the
North American session.
There are no major Canadian or U.S. data releases scheduled for
Tuesday, leaving bond markets to trade broadly on external headlines.
Write to David George-Cosh at david.george-cosh@dowjones.com
(END) Dow Jones Newswires
July 10, 2012 12:01 ET (16:01 GMT)
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