06:47 AM EDT, 08/02/2024 (MT Newswires) -- Long Canadian provincial bond returns were positive in the past month, helped by a rally in the 30-year Government of Canada (GoC) and relatively stable spreads, said Bank of Montreal (BMO).

Through July, 30-year Government of Canada (GoC) yields were down 13 bps, while shorter-term yields rallied even more sharply.

That came alongside a second consecutive 25 bps rate cut by the Bank of Canada (BoC) and solidifying expectations that the

United States Federal Reserve will begin to cut rates in September.

Long provincial total returns are now running at a solid 5.8% on a 12-month basis, outperforming Canadas by roughly 1.2 ppts, stated the bank. While this is a busy year for provincial issuance, overall market risk appetite remains "healthy."

Long provincial spreads widened modestly across the board over the past month with little in the way of fiscal news, pointed out BMO. All provinces saw long spreads move higher by 1.5 to 3.0 bps in the month.

Over the past 12 months, relative performance remains mixed with Alberta leading the pack (narrowing by 2 bps) while Quebec and British Columbia have lagged (6.5 bps wider) alongside deteriorating fiscal outlooks, added the bank.