CANADA FX DEBT-C$ steadies with equity markets

Wed Apr 11, 2012 8:21am EDT
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* C$ at C$1.0025 vs US$, or 99.75 U.S. cents
    * Spanish, Italian bond yields fall
    * Bond prices mostly lower

    By Jon Cook	
    TORONTO, April 11 (Reuters) - The Canadian dollar firmed
against its U.S. counterpart on Wednesday after falling nearly a
cent the previous session as Spanish and Italian debt yields
eased and equity markets steadied after good earnings from top
aluminum producer Alcoa.	
    Yields for 10-year Italian and Spanish bonds eased off
Tuesday levels around 6 percent - a level economists see as
unsustainable over long periods - but nervousness remained ahead
of a bigger Italian debt sale on Thursday. 	
    Rising Spanish bond yields have exacerbated concerns about
the fragility of peripheral euro zone economies in a market
already hurt by last week's disappointing U.S. job report and
soft Chinese imports. 	
    Risk sentiment was also boosted overnight by strong
after-the-bell earnings from Alcoa, which posted a first-quarter
profit that beat analysts' forecast for a loss. 	
    "Alcoa was the principal driver of it with
better-than-expected results marking an encouraging start to
earnings season in the U.S.," said Adam Cole, global head of
foreign exchange strategy at Royal Bank of Canada in London.	
    "That really is leaving all markets with a better appetite
for risk and the Canadian dollar is being pulled along by that."	
    At 8:10 a.m. (1210 GMT), the Canadian dollar at
C$1.0025 versus the U.S. dollar, or 99.75 U.S. cents, up from
Tuesday's North American close at C$1.0041 versus the U.S.
dollar, or 99.59 U.S. cents.	
    Commodity prices also rallied, as oil edged higher to around
$120 a barrel on Wednesday, after falling to its lowest level in
almost two months and copper holding near $8,000.  	
    Canadian government bond prices were mostly lower with
Canada's 2-year bond down 6 Canadian cents to yield
1.221 percent, while the 10-year bond dropped 39
Canadian cents to yield 2.029 percent.