Canadian dollar unmoved on budget, bonds slump
Canadian 10-year yields move higher on rising debt
The Canadian government wants to take advantage of low borrowing costs to spend more but they may need to hurry.
Benchmark Canadian government 10-year yields moved up to 1.336% from 1.310% before the announcement and 1.280% earlier today.
A big reason for the jump is amount of debt issuance. The coming year will see 30% more bonds issued than the record set in 2009.
Those yields still have a long way to go until they approach the 1.94% that US Treasuries are yielding but the narrower gap could give the loonie a small lift at some point (at least until the deficits get out of control).