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CIBC Notes Government of Canada Bonds Fall "Slightly" on Wider-Than-Expected Deficit

BY MT Newswires | ECONOMIC | 01/29/26 10:49 AM EST

10:49 AM EST, 01/29/2026 (MT Newswires) -- Canada's international trade deficit widened to $2.2 billion in November from $400 million in the prior month, as exports dropped off, said CIBC after Thursday's data.

The result was worse than the consensus expectation for a $700 million shortfall, noted the bank.

The unwrought gold category has been a source of volatility lately, and was responsible for the entire drop in exports seen in November, stated the bank. Lower unwrought gold shipments to the United Kingdom, United States and Hong Kong were behind that move, and excluding the metal/non-metallic mineral category would have seen exports increase by 2.5%.

The data continues to suggest that net trade subtracted slightly from growth in Q4, as imports rebounded while exports remain subdued. The bank expects exports to remain under pressure in the near term due to tariffs and uncertainty around CUSMA renegotiations, with a sustainable improvement likely in the second half of the year.

Government of Canada bond yields initially fell slightly on the wider-than-expected deficit, according to CIBC.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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