Canadian bonds remain volatile as investors await U.S. election result

The Canadian government bonds remained volatile Tuesday as investors await the outcome of United States presidential elections of 2016.

The yield on the benchmark 10-year bond, which moves inversely to its price, fell 1/2 basis point to 1.213 percent, the yield on long-term 30-year note also dipped 1/2 basis point to 1.865 percent and the yield on short-term 2-year bond remained steady at 0.55 percent by 12:50 GMT.

Treasury prices are likely to remain highly volatile ahead of the United States’ presidential election scheduled for Tuesday, November 8, 2016. We suggest that investors should retain their positions until the election result is revealed and also avoid creating any new positions.

The Canadian bonds have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Bank of Canada's target. The International benchmark Brent futures fell 0.41 percent to $45.95 and West Texas Intermediate (WTI) tumbled 0.45 percent to $44.69 by 12:50 GMT.

Lastly, Canadian stocks may struggle to continue its winning track Tuesday morning amid sluggish commodities.

The S&P/TSX Composite Index rose 0.99 percent at the close of the trading session to 14,652.45 on Monday.