Canada’s real-return bonds are outperforming other debt as investors buy inflation protection after the Bank of Canada halted its interest-rate increases and the U.S. central bank signaled further debt purchases.
Quebec Finance Minister Nicolas Marceau said the province will keep a pledge to eliminate its deficit for the first time in four years by raising income and consumption taxes and capping infrastructure spending, in a budget that drew immediate criticism from opposition lawmakers.
The Canadian dollar fell from almost a two-week high against its U.S. counterpart as Bank of Canada Governor Mark Carney was named chief of the Bank of England, spurring speculation over who will replace him in Ottawa.
Bank of Canada Senior Deputy Governor Tiff Macklem has emerged as the front-runner to succeed Mark Carney as head of the central bank as it grapples with slowing growth and record consumer debt levels.
Canadian bonds, the worst performing sovereign-debt market the past three months after Greece and Portugal, may fall further as investors speculate policy makers will raise interest rates as early as June.