CANADA FX DEBT-C$ extends gains after U.S. jobs report

Fri Dec 4, 2009 9:18am EST
 
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   * Canadian dollar up at 95.48 U.S. cents
 * Bond prices lower across the curve
 (Adds reaction to U.S. jobs data, details)
 By Jennifer Kwan
 TORONTO, Dec 4 (Reuters) - The Canadian dollar extended
gains on Friday morning after U.S. data showed employers cut
far fewer jobs than expected in November, suggesting erosion of
the labor market was in its final stages.
 Following the release of the data, the Canadian currency
rose to as high as C$1.0433 to the U.S. dollar, or 95.85 U.S.
cents.
 U.S. employers cut 11,000 jobs in November, while the
unemployment rate fell to 10 percent from a 26-1/2-year high of
10.2 percent in October. For more see [ID:nN03103070].
 Analysts polled by Reuters had expected U.S. nonfarm
payrolls to drop 130,000 and the jobless rate to hold steady.
 "Payrolls for November fell by only 11,000 versus
expectations of a 125,000 drop. And if we factor in the upward
revisions to the two previous months of a whopping 159,000 this
report was effectively an increase of almost 150,000 for
November," Andrew Pyle, wealth advisor at ScotiaMcLeod, said in
a note, adding: "Talk about surprise."
 Before the U.S. jobs data, a report showed Canada's economy
created more jobs than expected in November and the jobless
rate fell, suggesting a recovery is in the making.
 Statistics Canada reported on Friday a net employment gain
of 79,000 in November, beating analysts' expectations of a
15,000 gain. The unemployment rate edged lower to 8.5 percent
from 8.6 percent in October. Analysts had expected a rise to
8.7 percent. [ID:nN04141170]
 "Obviously a very strong Canadian employment report, well
surpassing expectations," Camilla Sutton, currency strategist
at Scotia Capital, said. "The Canadian dollar has strengthened
on the back of it."
 Market watchers also said the report's details were strong,
with full-time employment rising by 39,000, and some 40,000
added to part-time payrolls. The job market was strongest in
the services sector, with the largest growth in education.
 At 8:49 a.m. (1349 GMT), the Canadian dollar fell back from
its high levels and stood at C$1.0473 to the U.S. dollar, or
95.48 U.S. cents, higher from Thursday's finish at C$1.0547 to
the U.S. dollar, or 94.81 U.S. cents.
 Crude oil, a key Canadian export, cut losses and bounced
above $77 a barrel after the U.S. jobs report. [O/R]
 BOND PRICES LOWER
 Canadian bond prices were lower across the yield curve
following the data, but the selling began even before the
release of the Canadian jobs report, with investors more
comfortable with the notion that the Bank of Canada may raise
interest rates before the U.S. Federal Reserve, said Mark
Chandler, fixed income strategist at RBC Capital Markets.
 "You can make the assumption that there was already some
position for this sort of event ahead of it," he said.
 The two-year government bond CA2YT=RR was down at C$99.97
to yield 1.265 percent, while the 10-year bond CA10YT=RR
slipped 75 Canadian cents to C$118.30 to yield 3.908 percent.
 (Reporting by Jennifer Kwan; Editing by James Dalgleish)
 ((jennifer.kwan@thomsonreuters.com; Tel: +1 416 941 8178;
Reuters Messaging: jennifer.kwan.reuters.net@reuters.com))
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FOR CANADIAN MARKETS NEWS, CLICK ON CODES IN BRACKETS:
Canadian dollar and bonds report....[CAD/][CA/]
TSX market report..........[.TO]
Headlines from global forex markets ...[FXNEWS]
Bank of Canada weekly t-bill auction...[CA/BIL]
Bank of Canada securities auctions.....[CA/AUC]
Bank of Canada interest rate story.....[CA/INT]
Reuters monthly Canadian dollar poll..FOREXPOLL33 [CAD/POLL]
Canadian interest rate poll...........[CA/POLL]
Reuters G7 quarterly economy poll....[ECILT/CA]
Weekly economic data poll......[ECI/CA][ECI/CI]
Reuters global stocks poll (Canada)...EQUITYPOLL5 [EPOLL/CA]
Top News: Canada ......[TOP/CAN]
Today in Canada.......[CA/DIARY]
Canadian debt and money news ....[D-CAN][M-CAN]
FOR CANADIAN MARKETS DATA, CLICK ON CODES IN BRACKETS:
Real-time Canadian economic RICS.......ECONCA
Canadian dollar quote............CAD=CAD=D3
Canadian bonds quote..CDBN<0#CABMK=>CABONDT
Canadian money market quote...CDMN<0#CAMMKT=>
Canada-Treasury spread rates........<CA/SPREAD>
Canadian Debt and Forex speed guide...........<CA/DEBT><CAD/1>
Canadian Equities speed guide.......<CA/EQUITY>
S&P/TSX Composite index ...............GSPTSE
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  CAC-40...FCHI  Paris market stories...[.PA]
  World Indices.......<0#.INDEX>
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