05/19/2026
Inflation Details:
The increase to 2.8% from the previous month’s reading of 2.4% is attributable to the disruption of energy supply from the Middle East, due to the war in the region, raised prices of fuel and power.
Transportation inflation surged to 7.6% from 3.7% amid 19.2% surge in energy prices (vs 3.9% in March).
In turn, prices for core sectors of the economy grew at a more moderate pace, aligned with the Bank of Canada's note that it did not see higher energy prices spread into inflation expectations so far.
The trimmed-mean and median core inflation rates followed by the BoC fell to 2% and 2.1%, respectively, below market expectations to their lowest in five years.
Food inflation eased to 3.5% from 3.7%, and shelter inflation inched marginally higher to 1.8% vs 1.7%. source: Statistics Canada
https://tradingeconomics.com/canada/inflation-cpi
Now the Bad News for the Bond Market
The Canadian 5 year bond yield is influenced heavily by the US 10 YR Treasury yield, but is also influenced by the global bond market. The good inflation news has not translated yet into any significant lowering of bond yields this morning and CNBC has our 5 year bond yield at a “52 Week High Today”.
Here’s a quick summary as to why this is:
It has a lot to do with oil prices rising, global inflation fears (bonds hate inflation) and global government deficits (bonds hate more bonds).
(Bloomberg) — Global bond yields hovered near multiyear highs as rising energy prices stoked inflation concerns.
30-year US yields were the most elevated since 2007 and the rate on similar-maturity German debt was the loftiest in 15 years. Japanese government bonds notched the biggest losses, with the 30-year yield surging to its highest since the maturity was first sold in 1999.
https://financialpost.com/pmn/business-pmn/global-bond-yields-at-multiyear-highs-on-mounting-inflation-risk
Global bond yields hovered near multiyear highs as rising energy prices stoked inflation concerns.
