06:56 AM EDT, 10/10/2024 (MT Newswires) -- The recent backup in Canadian bond yields isn't good news for those cheering on the recent decline in mortgage rates, said Bank of Montreal (BMO).

Last week's strong United States payrolls report dialed back

expectations of more aggressive near-term Federal Reserve easing, thereby reducing the likelihood that the Bank of Canada will cut rates by 50 bps at its upcoming meeting, noted BMO.

The shift has lifted five-year Government of Canada yields back above 3%, or up a "meaningful" 30 bps from just a few weeks ago, stated the bank.

Given that fixed mortgage rates tend to lag moves in the bond market, this will effectively wash out any of the downside pressure that was in place for mortgage rates, according to BMO.

The bank isn't saying rates aren't still headed lower -- they

probably are -- but the quick move down has hit a bit of a snag.