The Canadian government bonds gained on Thursday as oil prices have fallen due to an improvement in the prospects of supply outlook and also concerns of a slowing global economy.
The yield on the benchmark 10-year bond which moves inversely to its price fell 3 basis points to 1.098 percent and the yield on the short-term 2-year bonds dipped 2 basis points to 0.528 percent by 13:15 GMT.
The Canadian bonds have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Bank of Canada's target. Today, oil fell below $50 a barrel, pressured by higher Nigerian output and concern about the economic outlook following Britain's vote to leave the European Union last week.
Returning Nigerian supply will put pressure on prices, Goldman Sachs said, adding that outages caused by Canadian wildfires would virtually end by September. The International benchmark Brent futures fell 2.12 percent to $50.23 and West Texas Intermediate (WTI) dipped 1 percent to $49.38 by 13:15 GMT.
Lastly, futures were little changed for Canada's main stock index on Thursday as data showed Canada's economy grew by just 0.1 percent in April from March after two months of contraction.
Statistics Canada also reported that Canadian producer prices climbed more than expected in May, rising 1.1 percent from April, mainly on higher prices for energy products such as gasoline. September futures on the S&P TSX index were up 0.01 percent at 12:30 GMT.
The material has been provided by InstaForex Company – www.instaforex.com