Canadian bond trading slowed sharply in July, but the decline largely reflected normal seasonality, with secondary-market trading averaging a 15% monthly drop in July since 2018, the largest seasonal decline of any month, according to National Bank of Canada.
Strong first-half trading has pushed year-to-date (YTD) volumes 9.2% above 2025 levels, while provincial, Crown and municipal bond activity remains firm, with trading also shifting further out the curve as longer-dated provincial bonds see particularly strong demand, said the bank in Wednesday's note.
"Canada's bond market is still characterized by relatively healthy secondary liquidity," wrote National Bank's Chief Rates and Public Sector Strategist Warren Lovely in the note.
Corporate bond trading eased after an exceptionally strong June, while year to date volumes for bonds with maturities beyond 10 years remain below last year's levels despite increased sales of bonds from big tech companies, added the bank.
The market is becoming increasingly international, with non-Canadian residents continuing to account for a meaningful share of trading, reaching a record 26% of corporate bond activity in July, according to National Bank.