The name’s bond, government bond

Good morning. If you messed up at work recently, take solace that you’re not the Prime Video employee who accidentally uploaded a whole movie to the streamer before it hit theatres. 

For a brief window yesterday, the new Jason Statham vehicle Mutiny was available to watch on Amazon Prime in the U.S., two days before its theatrical-only release Friday. It’s unclear exactly what happened, but we assume that somebody down the line clicked the wrong button. 

At least it was a late-summer action potboiler and not a potential Oscar winner. Please don’t read that as a shot at Statham — we think The Beekeeper should have racked up awards.   

Today’s reading time is 5½ minutes.

Markets: News that the U.S. might cut tariffs on some Canadian steel and aluminum imports drove the materials sector to its best day in more than six years yesterday and lifted Canada’s main stock index out of the red.

It’s time to talk about government bond yields — please, contain your excitement!

Driving the news: Long-term federal borrowing costs hit multi-decade highs earlier this week across several major economies as investors grow increasingly concerned about inflation that just won’t seem to go away and mounting government deficits. Yesterday, the U.S. was forced to more than double the size of debt buybacks to drive bond yields down.

Why it’s happening: A maelstrom of factors have weighed on government bonds this year. Firstly, the never-ending war in Iran has reignited fears about inflation, which devalues bonds. Secondly, investors are tapped out after shovelling cash into tech companies for AI projects. And thirdly, governments already owe a lot, and investors are hesitant to lend more. 

In Canada: These same pressures have led to a rise in Canadian bond yields. While they’re not as high as in many other places, as our debt load isn’t as heavy and inflation is relatively subdued, they’re still hovering around levels last seen in 2009. And after this week’s hotter-than-expected inflation report, they could climb further. 

Why it matters: Bond sell-offs have numerous economic ripple effects, like higher borrowing costs for governments that make deficit spending more expensive. Perhaps the one most immediately felt by Canadians, however, will be the upward pressure this will exert on mortgage rates, which are anchored to bond yields.—QH

Sectoral tariffs set to be be reduced as part of the new Canada-U.S. trade deal. Tariffs on some steel and aluminum products will reportedly be cut in half under the tentative deal, knocking them down from the current 50% rate. Sources told CTV News that the level of sectoral tariff relief will ultimately “make or break the deal,” which has yet to be finalized. Donald Trump, who paused a new wave of 50% tariffs, said the two sides do in fact have a “DEAL”, but we probably don’t have to tell you he’s changed his mind before. In the interim, Mark Carney has asked the premiers to lift bans on alcohol from the U.S. (CTV News)

Zelenskyy fires top aide after anti-corruption raid. In the latest corruption scandal under Ukrainian President Volodymyr Zelenskyy, the office of his close ally Iryna Mudra was raided in connection to an alleged scheme to launder US$3.4 million. Mudra’s firing came just a day after Zelenskyy’s recently fired defence minister called for a national election — the first real challenge to his presidency since Russia’s invasion of Ukraine. (Associated Press)

Canadian grocery giants tied up in a fake maple syrup lawsuit. Loblaw, Sobeys, and Metro have been added as defendants to a proposed class action lawsuit in Quebec that alleges a local maple syrup producer secretly cut his product with 50% cane sugar (a sacrilegious crime). The suit alleges the grocers, which may have sold  hundreds of thousands of the cans, demonstrated “serious negligence” in selling the fake maple syrup. (CBC News)

📡 What else is on our radar: 

Pharma companies Moderna and Merck claimed to have achieved the first successful late-stage trial for a personalized mRNA cancer treatment. According to published results, a combo of Moderna’s customizable cancer vaccine and Merck’s immunotherapy drug Keytruda was able to delay the return of skin cancer for high-risk patients who had a melanoma removed. 

Why it matters: Most importantly, the trial has generated shareholder value, with Moderna shares up 60% and… we kid, we kid. Obviously, the potential breakthrough here is proving the viability of mRNA technology — which trains the immune system how to fight viruses and is best known for its use in COVID shots — in fighting cancer. If you’ll allow us to dream big, the eventual outcome could be a suite of drugs able to treat all the variants of the disease.

If they’re not going to be winning championships, Canada’s sports stars at least want their full signing bonus. 

What happened: The Toronto Maple Leafs’ John Tavares was in court this week fighting the Canada Revenue Agency (CRA) over a disputed $8 million tax bill tied to his US$15.3 million signing bonus from 2018. The former captain claims the CRA miscalculated what he owes.

Catch-up: Bonuses for U.S.-resident athletes joining a Canadian team are taxable, but, as part of an exemption, can’t exceed a 15% rate. Tavares argues his bonus should be taxed at 15% as he was a New York resident in 2018 and spent just 45 days in Canada that year. 

Why it matters: With higher taxes, smaller markets, and less-than-ideal weather, Canadian franchises already have a hard enough time luring top talent from the U.S. If Tavares is unsuccessful in his bout with the CRA, it could further deter athletes from coming north of the border, even if they’re promised tax exemptions.

Our take: The Jays have somewhat bucked this trend — Vladimir Guerrero Jr., Dylan Cease, George Springer, to name a few exceptions — but Rogers has shown that you have to overpay (often by a lot) to attract or retain talent in Canada.—LA

🫶 22%. Share of LinkedIn users who have sent or received romantic messages on the platform, according to a survey from Zety. One in four professionals surveyed believed that using LinkedIn as a dating tool was acceptable, despite the company’s no-romance rules.

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