11:27 AM EDT, 04/02/2025 (MT Newswires) -- Long provincial returns were muted over the past month, as slightly lower Government of Canada yields were offset by wider provincial spreads, said Bank of Montreal (BMO).

Risk appetite continues to be impacted by the Canada-United States tariff battle ahead of reciprocal tariffs expected later Wednesday, wrote the bank in its Provincial Credit Watch edition of April.

The Bank of Canada cut interest rates by another 25 bps on March 12, but firming inflation on the ground suggests that they could be on hold in the near term, unless growth cracks under the stress of the trade war.

All told, long provincial total returns are now running at just over 7% for the past year, still outperforming Canadas, stated BMO.