Canadian bonds trade nearly flat ahead of August GDP figures, crude oil remains volatile

The Canadian government bonds traded nearly flat Thursday as investors await August gross domestic product (GDP) figure. Also, volatile crude oil prices kept traders sidelined from safe-haven buying.

The yield on the benchmark 10-year bond, which moves inversely to its price, hovered around 0.97 percent mark, the yield on long-term 30-year note remained steady at 1.64 percent and the yield on short-term 2-year bond stood flat 0.51 percent by 12:30 GMT.

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. Crude oil prices climbed nearly 6 percent after OPEC confirmed that the group has struck a deal to lower crude output at its policy meeting in November.

This is the first agreement to cut production since the market crashed in 2014 following a supply glut. The International benchmark Brent futures rose 4 percent to $49.06 and West Texas Intermediate (WTI) also bounced 4 percent to $47 from the yesterday’s closing session.

Lastly, Canadian stocks are set to open a stronger session on Thursday, as rebounding oil prices could drive gains in the energy sector.

The S&P/TSX Composite Index rose 1.19 percent at the close of the trading session to 14,731.43 on Wednesday.