U.S. debt ceiling crisis could trigger Canadian bond yield drop

Ripple effects will be felt in Canada if the U.S. postpones or suspends upcoming debt payments.



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Canadian and U.S. bond yields typically move in lock step but that could change if the U.S. postpones or suspends upcoming debt payments, suggests a new commentary posted at Canadian Business. A decision not to raise the debt ceiling south of the border could see interest rates there rise while Canadian yields could drop, Erica Alini cited CIBC economist Avery Shenfeld as saying. An investor flight to safety could also push up the loonie and its perceived safe haven status.

Read more on the U.S. debt ceiling fallout and how it affects Canada at Canadian Business.

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