G14 - Information and Market Efficiency; Event Studies

• Hedge funds and bond market liquidity dynamics at the onset of the 2026 Middle East conflict

  Staff analytical paper 2026-42 Vincent Meh, Jabir Sandhu, Andreas Uthemann

  We investigate whether hedge funds contributed to Government of Canada bond market illiquidity at the onset of the Middle East war in early 2026. We find no evidence they did. Hedge funds remained active in primary auctions, while their secondary market trading remained broadly consistent with their usual relative-value strategies.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): G, G0, G01, G1, G12, G14, G2, G23, G24 Research Theme(s): Financial markets and funds management, Funds management, Market functioning