Bonds News

CANADA FX DEBT-C$ ends slightly firmer in quiet trade

 (Adds market participant comment, updates prices to close)
    * Canadian dollar settles at C$1.3316, or 75.09 U.S. cents
    * Bond prices lower across steeper maturity curve

    By Alastair Sharp
    TORONTO, April 17 (Reuters) - The Canadian dollar gave up
early gains to settle slightly higher against the U.S. currency
on Monday as oil prices slipped from recent highs and investors
returned from a long holiday weekend to strong Chinese growth
data and softer U.S. data.
    "It's a very quiet market that's getting kicked around by
some flows," said Brad Schruder, director of corporate sales and
structuring at Bank of Montreal.
    "Europe is closed and North America is coming back from a
long weekend," he added. "You're really not looking at anything
directional or strategic."
    The loonie, as Canada's currency is colloquially known,
caught a boost early in the session after data showed China's
economy expanded faster than expected in the first quarter, with
industrial output up by the most in more than two years.
    Demand for industrial metals and other materials in China
can support the commodity-linked Canadian currency.
    The Canadian dollar          ended the day changing hands at
C$1.3316 to the greenback, or 75.09 U.S. cents, slightly
stronger than Thursday's close of C$1.3328, or 75.03 U.S. cents.
    The currency's strongest level of the session was C$1.3264,
while its weakest level was C$1.3321.
    BMO's Schruder said pricing should get more indicative
closer to Friday's release of Canadian inflation data.
    He said further evidence of economic strength in upcoming
Canadian data coupled with oil prices remaining above $50 a
barrel could provide a tailwind for the Canadian currency in
coming weeks, notwithstanding any further heightening of
geopolitical tension.
    Global risks remained in focus during the session, as U.S.
Vice President Mike Pence warned North Korea not to test
President Donald Trump's resolve after a failed ballistic
missile test.             
    U.S. retail sales fell for the second straight month in
March and consumer prices dropped for the first time in just
over a year, a report from the Commerce Department showed on
Friday, when North American markets were closed.
    Canadian government bond prices turned flat to lower across
the maturity curve, with the two-year            ending down
half a Canadian cent to yield 0.731 percent and the benchmark
10-year             off 17 Canadian cents to yield 1.514
    The Canadian two-year bond was yielding 47 basis points less
than its U.S. counterpart. The spread was the narrowest since
late February.
    Crude oil prices slipped 1 percent on Monday in subdued
trading after the Easter holiday weekend, on news of rising U.S.
shale production and profit-taking following three straight
weeks of gains.      

 (Reporting by Alastair Sharp; editing by Diane Craft)