US 10Y vs Canada 10Y Government Bond Yield
Live side-by-side comparison with current values, changes, and key statistics.
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.
Commodity Cycle Impact
Canada is commodity-leveraged economy. Oil + materials + agriculture significant share of GDP. Commodity price changes affect Canadian inflation + growth + currency.
April 2026: WTI $95.85 (Iran war). Supports Canadian commodity exports + currency.
Commodity supercycle (2007-2008, 2021-2022): CAD strengthens; Canadian yields rise faster than US.
Commodity collapse (2014-2016): CAD weakens; Canadian yields fall faster than US.
April 2026: oil supportive of CAD.
Historical Cycles
2007-2008 commodity peak: Canada 10Y briefly above US 10Y. CAD strong.
2014-2016 oil collapse: Canadian 10Y collapsed faster than US. Spread expanded substantially.
2020 COVID: both fell to 0.50% region. Roughly parallel.
2022-2023 hiking: BoC peaked 5.00%; Fed 5.50%. Both rose.
2024-2025 cutting: BoC cut faster than Fed (~200bp vs Fed 100bp).
April 2026: BoC at 3.00%, Fed at 3.50-3.75%. Spread ~65bp at 10Y level.
Cross-Border Macro Read
US-Canada 10Y spread serves as cross-border macro read. Wider US premium signals: US-specific fiscal stress, persistent inflation, or Fed hawkishness. Compressed spread signals: Canada commodity tailwind or BoC tightness.
April 2026: 65bp spread reflects modest US fiscal premium. Both curves roughly parallel.
Volatility and Trading
US 10Y vol 80-150bp annualized. Canada 10Y vol similar. Correlation 0.85-0.95.
US 10Y exposure: TLT, IEF, 10Y futures (TY). Canada 10Y exposure: ZLB (BMO long Canadian Treasury), CGB (Canada 10Y futures on MX).
USD/CAD direct exposure: FXC (CAD ETF), USDCAD futures (6C).
Reading the Pair as a Trading Tool
Spread > 100bp (US above): US fiscal stress + persistent inflation. Long Canada bonds.
Spread 50-100bp (current April 2026): typical regime. Modest US premium.
Spread < 0 (Canada above): commodity supercycle or US recession. Long US bonds.
April 2026: 65bp spread. Stable regime.
Key watches: BoC policy meetings; Fed FOMC; commodity prices; US fiscal trajectory.
Forward Path
US 10Y 4.31%; Canada 10Y 3.65%; spread 65bp. BoC at 3.00%, Fed 3.50-3.75%. WTI $95.85.
Forward: BoC potential cuts more aggressive than Fed (Canadian inflation closer to target). Spread could expand. CAD weakening. US fiscal trajectory critical.
Key watches: BoC June 2026 meeting; Fed FOMC May 6-7; oil prices; US fiscal announcements.
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 1,207 aligned daily observations ending .
Following these triggers, Canada 10-Year Government Bond Yield rises 0.79% on average over the next 5 sessions, versus an unconditional baseline of +0.47%. 121 qualifying events; Canada 10-Year Government Bond Yield closed positive in 54% of them.
Following these triggers, Canada 10-Year Government Bond Yield rises 0.97% on average over the next 5 sessions, versus an unconditional baseline of +0.47%. 121 qualifying events; Canada 10-Year Government Bond Yield closed positive in 50% of them.
Past behavior in the tails is descriptive, not predictive. Mean response is the simple arithmetic mean of compounded 5-day forward returns following each trigger event; baseline is the unconditional mean across the full sample window. Edge measures the gap between the two.
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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.
What is the typical range of the US-Canada 10Y spread?+
The US-Canada 10Y spread typically ranges between roughly negative 100 basis points and positive 100 basis points, with excursions beyond that range usually associated with significant policy divergence or a major commodity-cycle shift. The spread mean-reverts on a multi-quarter horizon.
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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.