US 10Y vs Canada 10Y Government Bond Yield
US 10Y Treasury yield (FRED DGS10) sits at 4.31 percent (April 2026). Canada 10Y Government Bond yield (Valet series V39055) approximately 3.65 percent (April 2026).
Also known as: 10Y Treasury Yield (10Y yield, 10 year treasury, TNX) · Canada 10-Year Government Bond Yield (Canada 10Y, GoC 10Y yield, Canadian 10-year bond, CAD 10Y)
Why This Comparison Matters
US 10Y Treasury yield (FRED DGS10) sits at 4.31 percent (April 2026). Canada 10Y Government Bond yield (Valet series V39055) approximately 3.65 percent (April 2026). US-Canada 10Y spread approximately 65 basis points (US above Canada). Long-term spread averages 0-100bp. April 2026 reading is mid-range. The 10Y spread captures: (1) Bank of Canada vs Fed policy divergence; (2) long-end fiscal trajectory differences (US fiscal concerns more pronounced); (3) commodity cycle (Canada commodity-leveraged through oil + materials). Canadian 10Y typically tracks US tightly due to integrated capital markets but diverges during specific regimes.
The April 2026 Configuration
US 10Y 4.31% (April 2026); Canada 10Y ~3.65%. US-Canada 10Y spread ~65bp (US above Canada).
BoC at ~3.00% policy rate (cut from peak 5.00% in 2024-2025). Fed at 3.50-3.75% (paused). BoC-Fed differential ~50bp (BoC below Fed).
Canadian inflation: CPI ~2.0% (April 2026 estimate). Closer to target than US.
The combined April 2026 reading: US 10Y elevated relative to Canada reflecting US fiscal concerns + persistent inflation. Canada more accommodative due to better inflation profile.
Why US and Canada 10Y Move Together
US and Canada have deeply integrated capital markets. Drivers of correlation. Trade integration: USMCA + cross-border supply chains. Demographic similarity: aging populations. Fed-BoC similar policy frameworks. Cross-border institutional investment + arbitrage.
Correlation typically 0.85-0.95 (very high) during normal regimes. Spread mean-reverts to 0-100bp range.
April 2026: spread 65bp (mid-range). Reflects modest policy divergence + fiscal concerns.
How the Spread Diverges
Spread expands (US > Canada): US fiscal stress; commodity weakness (Canada hurt); Fed hawkish vs BoC dovish.
Spread compresses (Canada > US): commodity supercycle (Canada benefits); BoC hawkish vs Fed dovish; US recession.
April 2026: 65bp spread reflects modest US fiscal premium + slightly tighter Fed.
Long-run correlation 0.85-0.95.
How the Pair Affects USD/CAD
US-Canada rate differential drives USD/CAD direction. Higher US rates support USD/CAD (USD strength).
April 2026: USD/CAD ~$1.36 (CAD weak). Reflects: US fiscal premium + Fed slightly above BoC. Long-term USD/CAD averages $1.30-$1.40.
Differential narrowing would support CAD strength. Wider differential (US fiscal surprise) would support USD/CAD higher.
Conditional Forward Response (Tail Events)
How Canada 10-Year Government Bond Yield has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in 10Y Treasury Yield. Computed from 1,209 aligned daily observations ending .
Following these triggers, Canada 10-Year Government Bond Yield rises 0.99% on average over the next 5 sessions, versus an unconditional baseline of +0.57%. 121 qualifying events; Canada 10-Year Government Bond Yield closed positive in 56% of them.
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Frequently Asked Questions
Why do US and Canadian 10Y yields usually move together?+
The deep integration of US and Canadian capital markets, shared trade exposure, and similar demographic-inflation profiles mean the two curves respond to most macro shocks in near-unison. Cross-border arbitrage by institutional investors keeps the spread tight in normal conditions.
What drives divergence between US and Canadian 10Y yields?+
Divergence typically reflects either a Bank of Canada signal that is stronger or weaker than the Fed's, Canadian fiscal surprises (federal or provincial), or commodity-cycle shifts that change Canadian growth expectations. Idiosyncratic Canadian political risk also occasionally widens the spread.
How does the US-Canada 10Y spread interact with USD/CAD?+
The long-end rate differential affects USD/CAD through duration-hedged carry flows, though the short-end differential is usually the larger driver. Together, the two differentials give a more complete read on CAD drivers than either one alone.
When does Canada 10Y typically lead US 10Y?+
Canada 10Y sometimes leads US 10Y during commodity-cycle turns, because Canadian inflation and growth expectations shift with commodity prices before US expectations do. The lead is usually short (days to weeks) and only visible in commodity-driven cycles.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.