Slightly better sentiment on rates/bond markets

Yesterday we got better than expected inflation in Canada, a super strong 20Y auction in the US, and today better than expected inflation in the UK.

As a result, the yield on 10-year American bonds is currently around 4.284%. On Monday, the yield reached almost 4.35%.

Figure 1 shows a comparison of annual inflation in Canada and the US.

Figure 2 shows the same series but comparing the monthly change.

Yesterday, the market expected inflation in Canada at 3.1% YoY - and got 2.8%. Monthly changes compared to the USA also look encouraging.

Core inflation calculated by the BoC also dropped in February to 3.13% (BoC Core Measures Average CPI), prev. 3.37%, rev. 3.33%.