CANADA FX DEBT-C$ ends flat, new supply floods bond market
* C$ little changed at 98.96 U.S. cents
* Bonds edge up but gains capped by new supply (Adds details)
TORONTO, Dec 9 (Reuters) - The Canadian dollar edged a touch higher against the U.S. currency in a restrained trading range on Thursday.
The Canadian currency CAD=D4 moved in a narrow band of about 60 ticks and finished the North American session at C$1.0105 to the U.S. dollar, or 98.96 U.S. cents, little changed from Wednesday's close of C$1.0108 to the U.S. dollar, or 98.93 U.S. cents.
"There seems to be a distinct lack of news and a rather apathetic outlook from the market," said John Curran, senior vice president at CanadianForex. "Realistically the market seems to be reacting more to negative news than it does to positive news."
During the day, the currency briefly firmed to a session high at C$1.0066 to the U.S. dollar, or 99.34 U.S. cents, after recovery hopes perked up on a U.S. labor report that showed new claims for unemployment benefits were lower than expected last week. [ID:nN09222654]
There was little reaction to Canadian data that showed new home prices edged higher by 0.1 percent in October from September, the third consecutive gain. [ID:nN0979036]
The Bank of Canada's Financial System Review, which concluded overall risks to the domestic financial system have risen over the past six months, also yielded very little movement in the Canadian dollar. [ID:nN09234033]
BONDS SLIGHTLY HIGHER
Canadian bond prices edged higher on Thursday but gains were capped by new supply.
In new issues, the Province of Quebec sold C$500 million in a reopening of an existing 5.00 percent issue, according to a term sheet seen by Reuters. [ID:nN09221336][ISU-CAN]
"A lot of new issue supply may have just weighed on the market a bit," said Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment. He said a separate multi-tranche offering of about C$1.4 billion was also on deck to be priced on Thursday.
The two-year bond CA2YT=RR was up 4 Canadian cents to yield 1.669 percent, while the 10-year bond CA10YT=RR was unchanged to yield 3.259 percent.
Canadian government bonds had a mixed performance against their U.S. counterparts. The two-year maturity outperformed its U.S. counterpart, and was 103 basis points above its U.S. counterpart, compared with about 106 basis points in the previous session.
The 30-year issue underperformed, as a U.S. 30-year bond auction drew solid demand. (Reporting by Ka Yan Ng; editing by Peter Galloway)
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