Canadian 10-year bond yields hit highest since December last year; shrug off weakness in energy prices

The Canadian 10-year Treasury yields hit highest since December last year on Monday on following heavy sell-off in the U.S. debt market. Also, the market did not react to the weakness in energy prices.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose 12 basis points to 1.545 percent, the yield on long-term 30-year note jumped 10 basis points to 2.172 percent and the yield on short-term 2-year bond climbed 5 basis points to 0.680 percent by 12:50 GMT.

The Canadian bonds have been closely following developments in the U.S. debt market. The United States benchmark 10-year Treasury yield bounced 15 basis points to 2.242 percent for the first time in 2016. Also, 30-year Treasury yields jumped above 3 percent mark for the first time since the start of this year.

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.

Crude oil prices declined after the IEA warned a global supply glut may persist despite OPEC efforts to negotiate coordinated output cuts. The International benchmark Brent futures fell 1.09 percent to $44.26 and West Texas Intermediate (WTI) also dipped 0.55 percent to $42.86 by 12:50 GMT.

Lastly, Canadian stocks may struggle to recover its winning track Monday morning amid sluggish commodities.

Meanwhile, the S&P/TSX Composite Index fell 1.28 percent at the close of the trading session to 14,555.41 on last Friday. While at 12:00 GMT, the FxWirePro's Hourly Canadian Dollar Strength Index was seen approaching bullish trend, currently at 73.26 (higher than 75 represents purely bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex