Canadian bonds strengthen following weakness in energy prices; GDP data in focus

The Canadian government bonds strengthened Monday as energy prices fell after OPEC discord scuttles output cut talks.

The yield on the benchmark 10-year bond, which moves inversely to its price, fell 1-1/2 basis points to 1.212 percent, the yield on long-term 30-year note also dipped 1-1/2 basis points to 1.875 percent and the yield on short-term 2-year bond slid 1-1/2 basis points to 0.555 percent by 12:40 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. Crude oil prices fell amid signs of deadlock at a technical OPEC meeting in Vienna as the cartel tries to work out an implementation framework for an output reduction deal agreed in September. The International benchmark Brent futures fell 1.24 percent to $50.05 and West Texas Intermediate (WTI) dipped 1.09 percent to $48.17 by 12:40 GMT.

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

The S&P/TSX Composite Index fell 0.33 percent at the close of the trading session to 14,785.29 on Friday.