Business Brief: Following the yields

NEWSLETTER Business Brief: Following the yields ANDREW GALBRAITH PUBLISHED 1 HOUR AGO UPDATED 26 MINUTES AGO COMMENTS SHARE SAVE FOR LATER Listen to this article Learn more about audio Log in or create a free account to listen to this article. Good morning. After the U.S. and Iran began trading blows again on Sunday, higher oil prices sparked a rise in U.S. government bond yields. But American debt and the uncertainty of what is still to come create a complicated mix. Today, we explain what investors need to know. UP FIRST In the news Trade: U.S. ​Treasury ​Secretary Scott ‌Bessent said that he plans to meet with his Canadian counterpart at a gathering of G20 finance ministers this week. Departure: Frustrated by the pace of procurement project approval, Doug Guzman is expected to leave the Defence Investment Agency after one year in charge, sources say. Additions: Ottawa revamped the leadership of Invest in Canada, appointing private equity executive Gurinder Grewal as CEO and former diplomat Dominic Barton as board chair. Oil: Venezuela’s development deal with the U.S. ups the urgency of Canada’s effort to expand and diversify its energy exports. Open this photo in gallery: TADAMICHI/ISTOCKPHOTO / GETTY IMAGES IN FOCUS Listening to the beat of the bond market The 10-year yield has jumped to around 4.76 per cent, its highest level since January, 2025, and the 30-year at 5.25 per cent is little changed since before the U.S. Treasury deployed a water pistol to bring long yields back in line. Short-term yields are up, too. What’s going on? What do these numbers all mean, and what messages are they sending? The rudiments Let’s start with the basics. These yields reflect what investors are asking to be paid for the privilege of lending to the government for a given length of time. They can be plotted out to create a graphical depiction over time which is known as the yield curve. At the shorter end of the curve, the two-year yield is usually watched as an indication of where the market thinks short-term interest rates will be set. Federal Reserve Chair Kevin Warsh clarified the central bank’s intentions around its inflation target on Friday. Warsh “delivered a clear warning that unless inflation makes progress towards the 2-per-cent target ‘with speed’, the Fed could be pushed to tighten policy,” Scotiabank FX strategists Shaun Osborne and Eric Theoret said in a note to clients yesterday. The reactions The two-year U.S. government bond…