The latest from RateLand

"Inflation is coming down…. It's going to be 3% this summer, we think."—Bank of Canada's Tiff Macklem

Canada's 5-year yield rose five bps last week, nothing major. Spunky jobs data was the main reason.

Employment reports are backward-looking, however, while markets are forward-looking. Hence, the longer-term outlook hasn't changed much after April's data.

More important was the Fed removing its rate hike bias. Bond market participants now believe both the BoC and Fed will likely stay on pause. If those investors are right, we just got one week closer to rate "normalcy"—defined as policy rates reverting to their long-run neutral rates.

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