The Globe and Mail reports in its Friday, May 23, edition that the Bank of Canada and bond markets faced conflicting signals from this month's employment and inflation reports. The Globe's Salmaan Farooqui writes that Canada's job numbers were weaker than expected, with the unemployment rate at 6.9 per cent in April. This typically would lower bond yields and raise expectations for a BOC rate cut, providing potential relief for variable-rate mortgages and possibly lower fixed rates. However, then this month's inflation report came in hotter than expected. The overall inflation rate did drop to 1.7 per cent largely because of the elimination of the carbon tax, but core inflation remained high at 2.9 per cent. That would push up bond yields. This is the direction markets seemed to lean toward, as the five-year Canada bond yield rose as high as 3 per cent this week for the first time since January. Before this week's inflation report, markets had priced in a 65-per-cent chance of a rate cut when the BOC makes its decision in June. Now, those odds are down to 50 per cent. A weak economy with high inflation is a tricky environment in which to predict where mortgage rates will go.