Canada’s 10-Year Yield Has Taken Less Than Half the US Move
The US 10-year Treasury yield closed Wednesday at 5.11%, its highest since July 2007. Canada’s 10-year yield has not gone with it, and the size of the shortfall is worth measuring rather than assuming. Since the first trading day of 2026 the Canadian benchmark has risen 36 basis points against the American note’s 92. That is 39 cents of every dollar of the US move, and roughly the same ratio holds at every tenor on the curve.
The bond selloff is American. What Canada is paying instead is the currency.
The American number, first hand
The US 10-year rose 15 basis points on Wednesday, from 4.96% on September 22 to 5.11% on September 23, the largest single-day rise of 2026. We checked every daily close in the US Treasury’s own daily par yield curve files from January 2, 2007 forward. September 23, 2026 is the first close at or above 5.11% since July 13, 2007. That is the background to the Canadian question rather than the answer to it.
Canada’s data arrives a day late, and it has been arriving smaller
One housekeeping point matters for everything below. The Bank of Canada publishes its benchmark bond yields one business day behind the US Treasury. The most recent Canadian close available as of this writing is Tuesday, September 22. Wednesday’s Canadian print is not out, and we are not going to guess at it. The argument here is about the year, not about a single session.
Measured that way, the divergence is consistent to a degree no single day could produce.
| Benchmark | Canada, Jan 2 | Canada, Sept 22 | Canada change | US change | Canada’s share |
|---|---|---|---|---|---|
| 2-year | 2.61% | 3.25% | +64 bp | +138 bp | 46% |
| 5-year | 3.00% | 3.54% | +54 bp | +125 bp | 43% |
| 10-year | 3.47% | 3.83% | +36 bp | +92 bp | 39% |
| Long bond | 3.92% | 4.15% | +23 bp | +54 bp | 43% |
Canadian levels are Bank of Canada benchmark bond yields, January 2 to September 22, 2026. US changes are measured on the Treasury daily par yield curve, January 2 to September 23, 2026, and so include one additional session because of the publication lag. Long bond means the 30-year for the United States and the long-term benchmark for Canada.
Change in benchmark government bond yields since January 2, 2026, in basis points. Source: US Treasury daily par yield curve (long bond = 30-year); Bank of Canada Valet (long bond = long-term benchmark).
The ratio sits in a band of 39 to 46 percent across the whole curve. It is not one tenor and it is not one week. Canadian yields have moved in the same direction as American yields and roughly 40 percent as far, all year.
The gap is near its 2026 high and ordinary by 2025
Comparing like for like, on the September 22 closes both countries have published, the US 10-year at 4.96% sits 113 basis points above Canada’s 3.83%. The widest reading of 2026 came days earlier, at 114 basis points on September 18. The year opened at 72.
That is the whole of what the number supports. It is not a record and it is not close to one. Across every common trading day back to January 2, 2015, the gap averaged 106 basis points through 2025 alone, and peaked at 158 basis points on February 3, 2025, when the US 10-year was at 4.54% and Canada’s at 2.96%. Wide by this year’s standard, unremarkable by last year’s.
Benchmark 10-year government bond yields, 2026 to date. Canada publishes one business day behind the US Treasury. Source: US Treasury daily par yield curve; Bank of Canada Valet, benchmark bond yields.
Both front ends are priced for tightening. Only one is priced hard.
The convenient explanation for all of this is that the Canadian bond market is simply slow. The front end says otherwise. The Canadian 2-year at 3.25% sits a full 100 basis points above the Bank of Canada’s overnight rate, which has been held at 2.25% since the cut from 2.50% on October 30, 2025. A two-year note priced a percentage point through the policy rate is not a market ignoring the world. It is a market already carrying tightening.
It is carrying less of it than the American one, and the October 28 decision is where that shows up. One-month CORRA futures on the Montreal Exchange carried 11.63 basis points into that meeting as of the September 23 settlement, about 47 percent of a quarter-point increase, implying an overnight rate of 2.37%. Whether the Bank delivers one is a separate question from how it is priced, and we have looked separately at how thin the precedent for a Bank of Canada hike is.
The difference between the two curves is not direction. It is scale.
What the smaller move did to Canadian rate-sensitive stocks
A government bond yield is not only a bond yield. It is the rate at which every other asset’s future cash flows get marked back to today, which puts the discount rate among the handful of things that reliably move a share price across an entire index in a single afternoon. If that mechanism is new to you, our guide to what moves a stock price is the place to start, because the rest of this section is that mechanism playing out in real prices. If Canadian equities are discounted off Canadian yields rather than American ones, a day like Wednesday should leave a visible fingerprint.
| iShares ETF | Sector | Sept 23 close | Sept 23 move | 1-year total return | Distribution yield |
|---|---|---|---|---|---|
| XIU | S&P/TSX 60 | $52.95 | -1.54% | +21.21% | 2.15% |
| XUT | TSX Capped Utilities | $34.04 | -0.76% | +14.42% | 3.29% |
| XRE | TSX Capped REIT | $15.55 | -0.32% | +0.08% | 4.67% |
Prices and returns at the September 23, 2026 close, in Canadian dollars. One-year total returns include distributions. XIU serves as the index proxy because it comes from the same fund family as the two sector funds, which keeps the comparison like for like. Source: StockAnalysis.
The fingerprint is there. On the day the US 10-year posted its largest rise of the year and the TSX 60 fell 1.54%, the two most rate-sensitive sectors fell less than the index: utilities down 0.76%, REITs down 0.32%. That is the opposite of what a US-driven rate shock is supposed to do to them, and it is consistent with Canadian rate-sensitives being discounted off a Canadian curve that has moved roughly 40 percent as much.
Over twelve months, though, the REIT result is poor on its own terms. XRE returned 0.08% including distributions while the TSX 60 returned 21.21% and utilities returned 14.42%. We are not going to assign all of that to interest rates. We have not measured what office and retail property fundamentals contributed over the same period, so we are not claiming a single cause. Readers weighing the sector on ground that is measurable can start with Canadian REITs ranked on distribution safety.
Two spreads are worth setting side by side while the numbers are in front of you. XRE’s 4.67% distribution yield stands 84 basis points above the Canadian 10-year at 3.83%, which is what the market currently pays for taking property risk instead of government risk. XUT’s 3.29% sits 54 basis points below that same government yield, so a buyer of the utilities fund is accepting less current income than a Government of Canada bond pays. Both are facts about pricing rather than arguments for or against either fund.
The loonie is where the pressure went
A rate gap that widens has to show up somewhere. Through 2026 it has shown up in the exchange rate. USDCAD, on the Bank of Canada’s daily rate, opened the year at 1.3737, with one Canadian dollar worth 0.7280 US dollars. On September 23 it stood at 1.4096, or 0.7094. The loonie is down 2.55% against the US dollar year to date, and it weakened in every session from September 17 through September 23: 1.3988, 1.4002, 1.4021, 1.4064, 1.4096.
What it means for Canadian investors
The practical version is this. If the Canadian curve keeps absorbing something like 40 percent of the American move, then the rate against which Canadian dividend payers, REITs and utilities are valued stays a largely Canadian variable, and Wednesday’s session is what that looks like in a single day of prices. The adjustment does not disappear, though. It relocates into the exchange rate, where it lands on anyone holding, buying or earning in US dollars.
Two dates carry the next instalment. Canada’s September 23 close publishes on the Bank of Canada’s usual one-day lag, and it will show how much, if any, of Wednesday’s move crossed the border. Then the Bank of Canada decides on October 28, with 11.63 basis points priced into it.
Data as of
US Treasury yields are daily par yield curve closes through Wednesday, September 23, 2026, from the Treasury’s own published files for 2007 through 2026. Canadian benchmark bond yields are Bank of Canada figures through Tuesday, September 22, 2026, which is the most recent Canadian close published at the time of writing. USDCAD is the Bank of Canada daily exchange rate through September 23, 2026. October 28 pricing is the Montreal Exchange one-month CORRA futures settlement of September 23, 2026. ETF prices, one-year total returns and distribution yields are as at the September 23, 2026 close. Source: StockAnalysis.
Disclaimer
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. US Treasury daily par yield curve files for 2007 through 2026, fetched from home.treasury.gov on September 24, 2026. Canadian benchmark bond yields are Bank of Canada Valet series BD.CDN.2YR/5YR/10YR/LONG.DQ.YLD, fetched September 24, 2026, latest close September 22, 2026. Policy rate from Bank of Canada Valet V39079. USDCAD from Bank of Canada Valet FXUSDCAD. October 28 pricing from Montreal Exchange one-month CORRA futures (COA) settlement with spot CORRA from the Bank of Canada, fetched September 23, 2026. ETF prices, one-year total returns and distribution yields are from StockAnalysis at the September 23, 2026 close. All ratios, spreads and the 2007 to 2026 search for the last comparable close are computed by us from those files, and both charts are drawn directly from the same live Treasury and Bank of Canada feeds.
