CANADA FX DEBT-Canadian dollar rises, yearly gain of 5% tops G10 currencies

    * Canadian dollar rises 0.5% against the greenback
    * Loonie notches 14-month high at 1.2993
    * Price of U.S. oil falls 1%
    * Canadian bond prices dip across the yield curve

    TORONTO, Dec 31 (Reuters) - The Canadian dollar strengthened
to a 14-month high against its U.S. counterpart on Tuesday as
data from China supported the view that the global economy is
recovering, pushing the loonie's annual rally to 5%, the biggest
of any G10 currency.
    At 9:05 a.m. (1405 GMT), the Canadian dollar          was
trading 0.5% higher at 1.3000 to the greenback, or 76.92 U.S.
cents. The currency notched its strongest intraday level since
Oct. 24, 2018 at 1.2993.    
    Manufacturing activity in China expanded for a second
straight month in December as seasonal demand and signs of
progress in trade talks with Washington boosted factories'
output and order books.             
    On Monday, the White House's trade adviser said the
U.S.-China Phase 1 trade deal would likely be signed in the next
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from a pick up in global growth.
    Despite the loonie's 5% advance this year, it has slumped
19% since the start of the decade, hit when oil prices plunged
in 2014.
    U.S. crude oil futures        fell 1% on Tuesday to $61.05 a
barrel but were on track for monthly and annual gains, supported
by a thaw in the prolonged U.S.-China trade row and Middle East
    Canadian government bond prices edged lower across the yield
curve, with the two-year            down 0.5 Canadian cent to
yield 1.679% and the 10-year             falling 12 Canadian
cents to yield 1.653%.
    The 10-year yield has fallen about 31 basis points since the
start of 2019.
    Canada's bond market is due to close early ahead of the New
Year's Day holiday on Wednesday.

 (Reporting by Fergal Smith; Editing by David Gregorio)