"There's a bit of caution creeping into the market, [until] there's more details [on the euro zone plan]. Equities have sold off and we're seeing money flowing into bonds in the U.S.," said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto. "That trend is spilling on to Canada."
Canada's two-year bond yield fell to 1.016% from 1.085% Friday. The 10-year bond yielded 2.340%, down from 2.427% Friday. Bond yields move inversely to bond prices.
The euro-zone plan, which came last Thursday, led a sharp rally in equities, higher-yielding currencies and commodities last week as investors cheered the prospect of fixing Greece's debt and more liquidity at Europe's banks, but lack of details and timelines on the goals have since seen much of the optimism fade.
Separately, Canadian gross domestic product rose a stronger-than-forecast 0.3% in August over July, as the energy sector posted the largest gain in eight months.
"Beyond the headline surprise, this was a weak report. The bones of the report strike us as porous and tend to support the view of a weaker fourth quarter as the underlying momentum appears to be downshifting," said Jimmy Jean, economic strategist at Desjardins Capital Markets in Montreal. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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