CANADA FX DEBT-C$ weaker after mixed North American jobs data

Fri Sep 4, 2015 9:54am EDT
 
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* Canadian dollar at C$1.3223, or 75.63 U.S. cents
    * Bond prices lower across the maturity curve

    By Solarina Ho
    TORONTO, Sept 4 (Reuters) - Canada's dollar eased moderately
against its U.S. counterpart on Friday as markets digested mixed
U.S. and Canadian employment data for August.
    Canada unexpectedly added 12,000 jobs last month, which
diverged with economists' prediction of a loss of 4,500 jobs.
But the unemployment rate climbed to 7 percent, the highest in a
year, after having held steady at 6.8 percent for half a
year. 
    U.S. job growth rose less than expected in August even as
the unemployment rate dropped to a near 7-1/2-year low of 5.1
percent and wages rose. 
    The Canadian data, alongside trade and economic growth
reports earlier this week, is unlikely to persuade the Bank of
Canada that another interest rate cut is necessary at this time.
    The Canadian dollar initially rallied after the data,
hitting its strongest level of the session, but quickly pared
gains and weakened off slightly.
    "You don't have to dig too far beneath the surface to see
that it's a little bit more of a nuanced picture on both
reports," said Doug Porter, chief economist at BMO Capital
Markets.
    "At best it's neutral for the Canadian dollar. It may be
even a touch negative when people start thinking about what the
jobless rate did in the two countries."
    At 9:30 a.m. EDT (1330 GMT), the Canadian dollar 
was trading at C$1.3223 to the greenback, or 75.63 U.S. cents,
weaker than the Bank of Canada's official close of C$1.3194, or
75.79 U.S. cents.
    The loonie traded between C$1.3160 and C$1.3239 in Friday's
session.
    Canadian government bond prices were generally lower across
the maturity curve, with the two-year price down 4.5
Canadian cents to yield 0.454 percent and the benchmark 10-year
 falling 10 Canadian cents to yield 1.473 percent.
    The Canada-U.S. two-year bond spread narrowed to -26.7 basis
points, while the 10-year spread narrowed to -67.1 basis points.

 (Reporting by Solarina Ho; Editing by Paul Simao)