Canadian bond yields slide, loonie steadies, after tame US PPI data
TLT•Loonie steadies and trade talks progress
The Canadian dollar CAD= was nearly unchanged at 1.3935 per U.S. dollar, or 71.76 U.S. cents, after moving in a range of 1.3930 to 1.3958. On Wednesday, the currency touched its strongest intraday level since June 10 at 1.3905.
A Canadian government source directly familiar with trade negotiations with the United States said that talks were progressing well and Washington also wanted an agreement before a new U.S. tariff deadline on August 19.
The price of oil CLc1, one of Canada's major exports, was trading 2.2% lower at $81.44 a barrel as signs of weaker global demand competed with renewed concerns over supply disruptions.
Investors globally have worried that elevated energy prices will worsen the inflation outlook.
U.S. producer prices and rate expectations
U.S. producer prices were unchanged in July as goods prices fell and the cost of services increased marginally, while the year-over-year rate slipped to 4.7% from 5.5% in June, bolstering expectations that the Federal Reserve could keep interest rates unchanged next month.
"The report indicated that inflationary pressures remain elevated but eased during the month," Colin Cieszynski, chief market strategist at SIA Wealth Management, said in a note.
Canadian yields ease as U.S. inflation data cools
Canadian bond yields eased on Thursday and the loonie steadied near a two-month high, as data showed U.S. inflation pressures easing and after a Canadian government source said trade negotiations with the U.S. were progressing well.
The 10-year yield was trading 7.1 basis points lower at 3.621%, tracking moves in U.S. Treasuries. It touched a two-year high at 3.755% on Tuesday after recent jobs and GDP data pointed to a recovery in the domestic economy.
