CANADA FX DEBT-C$ mostly flat ahead of key jobs report

Thu Nov 6, 2008 9:48am EST
 
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 * Lower oil prices adding to pressure on Canadian dollar
 * Traders awaiting Friday's key Canadian jobs data
 * Bonds mostly flat given lack of data to spark a move
 By Frank Pingue
 TORONTO, Nov 6 (Reuters) - The Canadian dollar was little
changed versus the U.S. dollar on Thursday morning as traders
shied away from taking big positions ahead of the release of
Canadian jobs data for October on Friday.
 Bond prices were also relatively flat across the curve as a
greater sense of calm in equity markets this week has crimped
investor demand for more secure government debt.
 At 9:40 a.m. (1540 GMT), the Canadian unit was at C$1.1689
to the U.S. dollar, or 85.55 U.S. cents, down from C$1.1680 to
the U.S. dollar, or 85.62 U.S. cents, at Wednesday's close.
 Lower commodity prices took part of the blame for the dip
in the Canadian dollar, but it was being called more of a
flow-driven move since it paled in comparison to the sharp
swings it has experienced in recent weeks.
 "Compared to the kind of volatility we've experienced in
recent weeks, this is a minor move and that's why I believe
it's just an order or two going through the market," said
Matthew Strauss, senior currency strategist at RBC Capital
Markets.
 The Canadian dollar is not expected to make any significant
moves during the session with the looming jobs data due out at
the end of the week on the minds of most traders.
 After an unexpected surge of 106,900 new jobs in September,
analysts surveyed by Reuters expect a decline of 10,000 in
October, and for the unemployment rate to rise to 6.2 percent
from 6.1 percent.
 Data on Thursday that showed Canadian building permits rose
unexpectedly by 13.4 percent in September did not offer any
support to the Canadian currency as it is generally not viewed
as a market mover.
 BONDS FLAT
 Canadian bond prices were mostly unchanged across the curve
with dealers huddling on the sidelines ahead of Friday's key
employment report.
 The only domestic data due out ahead of the jobs report was
the Ivey Purchasing Managers Index for October due out at 10:00
a.m., but it is not a report that triggers a move in Canadian
bond prices.
 The Canadian overnight Libor rate LIBOR01 was 2.5000
percent, up from 2.4833 percent on Wednesday.
 Wednesday's CORRA rate CORRA= was 2.2402 percent, down
from 2.2439 percent on Tuesday. The Bank of Canada publishes
the previous day's rate at around 9 a.m. daily.
 The two-year bond was up 2 Canadian cents at C$101.57 to
yield 1.967 percent. The 10-year bond decreased 18 Canadian
cents to C$103.82 to yield 3.769 percent.
 The yield spread between the two- and 10-year bond was 178
basis points, unchanged from the previous close.
 The 30-year bond was down 30 Canadian cents at C$112.30 to
yield 4.252 percent. In the United States, the 30-year Treasury
yielded 4.219 percent.
 (Editing by Peter Galloway)