5 Things to Know Today — September 25, 2026

 

Friday, September 25, 2026  |  moneysavings.ca/canadian-money-brief

Bond yields are nearing levels not seen in nearly two decades, Iran is offering a Hormuz truce, Ottawa just posted a fresh deficit, the loonie slid to 70.74 cents, and Canadian consumers pulled back in July. Here's what each story means for your money.

01 — Interest Rates

Bond Yields Hit 5.10% — and Your Mortgage Is Watching

The 10-year U.S. Treasury yield climbed to approximately 5.10% overnight — a level last seen in 2007 — while the 30-year surged to around 5.43%, its highest since 2004. The spike was triggered by a combination of stronger-than-expected U.S. PMI data, hawkish comments from Federal Reserve officials in New York and Philadelphia, and a weak Treasury auction. Canada's own 10-year bond yield has been tracking close behind, already at multi-year highs.

Why does a U.S. number matter here? Canadian fixed mortgage rates are largely priced off the Government of Canada 5-year bond yield, which moves in lockstep with global bond markets. When U.S. yields surge, Canadian yields follow — and lenders reprice fixed-rate mortgages upward within days, sometimes hours.

💰 What It Means for YouIf you're coming up for mortgage renewal in the next 90 days, watch this closely. A rising bond-yield environment typically pushes the best 5-year fixed rates higher. If you have a variable-rate mortgage, your risk is the upcoming Bank of Canada decision on October 28 — where National Bank and Scotiabank are still forecasting a hike to 2.50%.

02 — Oil & Energy

Iran Proposes a 7-Day Hormuz Deal — Oil Dips on the Headlines

Iran has formally proposed reopening the Strait of Hormuz within seven days — conditional on the U.S. meeting specific demands — according to reports out of the UN General Assembly meetings in New York. Oil pulled back sharply on the headlines after Brent crude had settled the previous session at approximately $106.60 a barrel, near four-month highs. U.S. stock futures also drifted higher on the reported diplomatic opening.

Whether a deal materializes is another question. Talks at UNGA on Thursday failed to produce an agreement, and previous ceasefire signals from the region have proven short-lived. The Strait of Hormuz carries roughly 20% of the world's seaborne oil, making any resolution — or collapse of talks — a major price driver.

💰 What It Means for YouGas prices in Canada remain elevated. The CAA national average sat near 180 cents per litre heading into this week. If a Hormuz deal holds, pump prices could ease noticeably within two to three weeks as oil benchmarks drop. If talks collapse over the weekend, expect another spike. Keep an eye on prices through the weekend before planning any large fill-ups.

03 — Federal Budget

Ottawa Posts a $5.1-Billion Deficit for April Through July

The federal government released its fiscal monitor today, revealing a $5.1-billion deficit for the April-to-July 2026 period. The figures reflect both the ongoing cost of Canada's trade-war response — including the $7.5-billion business support package announced in September — and moderating revenues as economic growth slows under tariff pressure.

The deficit figure lands as the Carney government faces increased scrutiny over fiscal sustainability, particularly with bond markets already pushing yields higher. Higher deficits mean Ottawa must issue more debt — and with global bond investors demanding higher returns right now, that borrowing gets more expensive by the day.

💰 What It Means for YouA wider federal deficit, financed into a rising-rate environment, puts upward pressure on Canadian government bond yields — which feeds directly into fixed mortgage rates and the interest Canadians pay on car loans, lines of credit, and HELOCs. It also constrains the government's room to cut taxes or add new benefits in the near term.

04 — Canadian Dollar

The Loonie Slid to 70.74 Cents as the U.S. Dollar Surged

The Canadian dollar weakened to approximately 70.74 US cents (1.4133 USD/CAD) as of Thursday's close, down from 70.94 cents on Wednesday. The move is driven almost entirely by U.S. dollar strength: when U.S. yields rise sharply, global investors pile into the greenback, and commodity currencies like the loonie get sold off. Ongoing Canada-U.S. trade uncertainty is adding to the pressure.

To put this in context: as recently as mid-August, the loonie was trading near 72.7 cents. It has lost roughly two cents of value in under six weeks.

💰 What It Means for YouA weaker loonie makes everything imported from the United States more expensive — from groceries and electronics to appliances and vehicles. It also makes cross-border shopping and U.S. travel more costly. Conversely, if you hold U.S. dollar investments, their Canadian-dollar value has risen. If you're planning a U.S. trip, booking sooner may save you money if the dollar slides further.

05 — Consumer Spending

Canadian Retail Sales Slid 0.8% in July — First Drop in Seven Months

Statistics Canada's advance estimate for July retail sales pointed to a decline of approximately 0.8% — the sharpest monthly drop in ten months and the first negative reading in seven months. The number, which remains subject to revision, comes after a strong June (sales rose 0.6% to $74.3 billion), fuelled partly by the one-time Canada Groceries and Essentials Benefit and FIFA World Cup spending. July appears to have given back much of that gain.

The CIBC senior economist covering the data noted that despite monthly volatility, the underlying trend still appears to be "gradually upwards" heading into 2027. But the July stumble lands at a delicate moment — consumers are already absorbing higher gas prices, retaliation tariffs, and the threat of additional interest rate hikes.

💰 What It Means for YouWeak retail data could give the Bank of Canada some pause before raising rates in October — it signals consumers are already under pressure. If you're a small business owner, the July cooling is a reminder that the summer spending bump may be fading. Heading into fall, expect more cautious consumer behaviour as tariff-driven price increases work their way through the economy.

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All figures are sourced from Statistics Canada, BNN Bloomberg, Bank of Canada, and public market data as of September 25, 2026.
This post is for informational purposes only and does not constitute financial advice.