Thanks to pricing itself out of the market and tightening borrower criteria, Scotiabank's Canadian mortgage balances fell a couple of billion dollars in Q2 versus Q1. Negative growth, even if just one quarter, is a big deal for a Big 6 bank. In its conference call, Scotiabank noted

From 2008 to 2021, Canada's household debt soared from 80% of GDP to 107%. U.S. household debt-to-GDP slid from 100% to 75% in that same timeframe. To belabour the obvious, Canada has a worsening debt problem. And that problem could theoretically come to a head if/when

Despite the high probability that a U.S. debt limit deal will be reached by the Treasury's June 1 deadline, traders took U.S. yields higher on Tuesday. Hawkish Fed chatter added further fuel to the gains. All that U.S. drama dragged Canadian yields higher in sympathy.