Canadian 10-year bond yields hit highest since December last year flowing global debt sell-off

The Canadian 10-year Treasury yields hit highest since December last year on Wednesday following heavy sell-off in the U.S. debt market. Also, the Treasuries were pushed lower across the curve as investors moved away from safe-haven buying on rising Federal Reserve December rate hike hopes.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose 3-1/2 basis points to 1.570 percent, the yield on long-term 30-year note jumped 3 basis points to 2.191 percent and the yield on short-term 2-year bond climbed 1-1/2 basis points to 0.676 percent by 12:40 GMT.

The Canadian bonds have been closely following developments in the U.S. debt market. The United States benchmark 10-year Treasury yield bounced to 2.29 percent for the first time in 2016 after St. Louis Federal Reserve President James Bullard confirmed that rate-hike was possible in December.

Last week, the United States Republican candidate Donald Trump pinned his victory against Democrat opponent Hillary Clinton in the 2016 presidential election. Investors again revised the outlook for US interest rates after Donald Trump's victory, with the probability of a December rate hike by the Federal Reserve going from as low as 30 percent to as high as 84 percent.

Additionally, the fall in the number of people opting for unemployment benefits in the United States has strengthened the probability of a December interest rate hike by the Federal Reserve.

Oil prices decline more than 1 percent after weekly U.S. crude stocks rose beyond expectations and a strong dollar weighed on commodities. The International benchmark Brent futures fell 1.19 percent to $46.38 and West Texas Intermediate (WTI) also dipped 1.18 percent to $45.27 by 12:30 GMT.

Lastly, Canadian stocks may struggle to continue its winning track Wednesday morning amid sluggish commodities.

Meanwhile, the S&P/TSX Composite Index rose 1.08 percent at the close of the trading session to 14,756.28 on Tuesday. While at 12:00 GMT, the FxWirePro's Hourly Canadian Dollar Strength Index remained slightly bullish at 81.51 (higher than 75 represents purely bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex