Canadian government bond yields rose on Wednesday after Statistics Canada reported stronger than expected job numbers. The yield on the 10-year bond increased to 2.34%, up from 2.30% on Tuesday. Shorter term bonds also saw increases, with the 2-year yield rising to 1.08%.

The Canadian economy added 40,000 jobs in May, exceeding economists’ expectations of 25,000. The unemployment rate remained steady at 6.2%. The strong job numbers have led some analysts to speculate that the Bank of Canada may raise interest rates sooner than previously anticipated.

“The bond market is reacting to the possibility of a more hawkish Bank of Canada,” said Michael Gregory, head of fixed income research at BMO Capital Markets. “If the economy continues to perform strongly, the Bank of Canada may feel compelled to raise rates to keep inflation in check.”

The rise in bond yields could have implications for the Canadian economy. Higher yields could lead to increased borrowing costs for businesses and consumers, potentially slowing economic growth. However, higher yields could also attract foreign investment, which could boost the Canadian dollar.

The next Bank of Canada interest rate announcement is scheduled for July 12. Investors will be closely watching economic data in the coming weeks to gauge the likelihood of a rate hike.