CANADA FX DEBT-C$ firms after dismal U.S. jobs data casts doubt on Fed hike

Fri Oct 2, 2015 9:41am EDT
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* Canadian dollar at C$1.3245 or 75.50 U.S. cents
    * Bond prices mostly higher across the maturity curve

    TORONTO, Oct 2 (Reuters) - The Canadian dollar rallied to a
two-week high against its U.S. counterpart on Friday following
dismal U.S. labor market data that raised fresh doubts the U.S.
economy was ready for an interest rate hike this year.
    Hiring outside of farming climbed by 142,000 in September,
well below the 203,000 economists polled by Reuters had
predicted. August figures, already below forecast, were revised
sharply lower. 
    The disappointing numbers sent the greenback down sharply,
hitting a two-week low, against a basket of key currencies
including the loonie. 
    Federal Reserve officials have been signaling that they
planned to hike interest rates for the first time in nearly a
decade by the end of the year, but Friday's soft employment
numbers could fuel concerns that the U.S. economy may be dragged
by a China-led global economic slowdown.

    * At 9:25 a.m. EDT (1325 GMT), the Canadian dollar 
was trading at C$1.3245 to the greenback, or 75.50 U.S. cents,
firmer than the Bank of Canada's official close of C$1.3255, or
75.44 U.S. cents.
    * The loonie hit C$1.3184 after the U.S. data, its strongest
level in two weeks. It's weakest level of the session was
    * U.S. jobs data sent equities and oil prices lower.
    * Canadian jobs data for September will be released next
Friday. August trade data and Ivey PMI figures for Canada are
due next Tuesday. 
    * Canadian government bonds were underperforming U.S.
Treasuries, with the Canada-U.S. two-year bond spread narrowing
to 8.40 basis points and the 10-year spread narrowing to 58.8
basis points.
    * Canadian government bond prices were mostly higher across
the maturity curve, with the two-year price up 11
Canadian cents to yield 0.474 percent and the benchmark 10-year
 rising 71 Canadian cents to yield 1.351 percent.

 (Reporting by Solarina Ho; Editing by Nick Zieminski)