Bond traders take refuge after latest jobs report

Canada's latest unemployment report has prompted bond traders to seek safety in government bonds. The five-year government bond yield has dropped to a nine-week low, which could lead to lower fixed-rate mortgage rates.

Floating-rate mortgages are becoming more popular, especially with expected rate cuts from the Bank of Canada. A predicted 0.5% rate cut could save floating-rate mortgage holders between $25 to $50 monthly.

The rise in unemployment and falling bond yields are reducing pressure on fixed mortgage rates. Variable and three-year fixed rates are expected to benefit from future rate cuts.

In the U.S., a recent jobs report showed that 12,000 jobs were added in October, much lower than expected. Initially, the 10-year Treasury yield fell, but it quickly rebounded to its highest level since July.

The U.S. unemployment rate remained steady at 4.1%, with annual wage growth outpacing inflation. Investors viewed the underlying employment fundamentals as strong, contributing to the yield's recovery.

Upcoming elections and potential fiscal stimulus in the U.S. could further influence bond yields. If inflation pressures increase, bond yields may rise, affecting both the bond market and broader economy.