CANADA FX DEBT-C$ dips ahead of FOMC minutes despite firmer oil

Wed Nov 18, 2015 9:30am EST
 
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* Canadian dollar at C$1.3336 or 74.99 U.S. cents
    * Bond prices dip across the maturity curve

    By Fergal Smith
    TORONTO, Nov 18 (Reuters) - The Canadian dollar edged lower
against the U.S. dollar on Wednesday despite weaker than
expected U.S. housing starts and firmer crude oil prices, as
attention turned to the Federal Open Market Committee (FOMC)
minutes this afternoon.
    U.S. housing starts fell in October to a seven-month low,
but a surge in building permits suggested the housing market
remained on solid ground. 
    Negative for commodity currencies, base metals hit
multi-year lows as fears persisted over waning demand in top
metals user China following the release of home price data.
 
    Oil rallied on reports of falling stockpiles and rising
refinery activity in the United States, but trimmed gains ahead
of official inventory data this morning from the Energy
Information Administration. 
    Fresh terrorism anxiety also emerged after police raided an
apartment in a Paris suburb seeking suspects in last week's
attacks in the French capital. Heightened
geopolitical tensions following the Paris attacks had given a
boost to crude oil prices on Monday.
    At 9:13AM ET (1413 GMT), the Canadian dollar was
trading at C$1.3336 to the greenback, or 74.99 U.S. cents,
weaker than the Bank of Canada's official close on Tuesday of
C$1.3308, or 75.14 U.S. cents.
    The currency's strongest level of the session was C$1.3299,
while its weakest level was C$1.3348.
    U.S. crude prices were up 0.96 percent to $41.06,
while Brent crude added 1.49 percent to $44.22.    
   
    Canada's new Liberal government is reviewing a C$4.3 billion
($3.2 billion) package designed to compensate farmers for losses
they might incur under a new Pacific trade deal, Trade Minister
Chrystia Freeland told reporters on Wednesday. 
    Canadian government bond prices were slightly lower across
the maturity curve, with the two-year price down 2.5
Canadian cents to yield 0.635 percent and the benchmark 10-year
 falling 4 Canadian cents to yield 1.662 percent.
    * The Canada-U.S. two-year bond spread widened 1.6 basis
points to -24.5 basis points, while the 10-year spread was 2.4
basis points wider at -62.7 basis points as U.S. Treasuries
underperformed ahead of the FOMC minutes.
    The FOMC minutes for the October 27-28 meeting will be
released at 02:00 pm ET (1900 GMT). 

 (Reporting by Fergal Smith; Editing by Nick Zieminski)