CANADA FX DEBT-C$ falls with oil prices, equities eyed
* C$ slides 0.8 percent
* Canada manufacturer shipments unexpectedly up 0.1 pct
* Bond prices rise on weak U.S. retail sales data
By John McCrank
TORONTO, Nov 14 (Reuters) - The Canadian dollar fell against the U.S. dollar on Thursday, giving back some of the big gains from the previous session as oil prices retreated overnight.
Canadian bond prices rose in a safe haven bid along with the larger U.S. market after data showed record low U.S. retail sales numbers for October.
At 9:20 a.m. (1420 GMT) the Canadian dollar was at C$1.2210 to the U.S. dollar, or 81.90 U.S. cents, down from C$1.2115 to the U.S. dollar, or 82.54 U.S. cents, at Thursday's close.
The currency fell 0.8 percent, unwinding some of its 2.1 percent gain in Thursday's North American session.
That rally was sparked by a late surge in the equities markets and in commodity prices.
Canada is a major exporter of many key commodities, including oil, which was up 4 percent on Thursday but fell around 2.75 percent overnight.
"I think the markets are waiting to see if yesterday's move was really just a short squeeze, or the start of some kind of base building into yearend in equities," said Shane Enright, currency strategist at CIBC World Markets.
"You've got a lot of things that are encouraging, but you have to build upon them to really get a genuine asset market recovery to come, and when that happens, you will see weakness in the U.S. dollar, I think, and broader currency strength elsewhere."
On the Canadian data front, Statistics Canada said shipments by Canadian manufacturers unexpectedly rose by 0.1 percent in September from August, driven by strong demand from the aerospace industry.
Analysts in a Reuters poll had forecast a 1.5 percent drop in sales on fallout from the U.S. economic slowdown, which caused sales to tumble 3.7 percent in August.
South of the border, U.S. data showed a record decline in retail sales in October -- a 2.8 percent slide. Sales excluding autos were down a record 2.2 percent, versus market expectations of a 1.2 percent fall.
BOND PRICES RISE
Canadian bond prices rose along with the U.S. Treasury market, largely due to the U.S. data, which ignited a safe haven rally for government debt.
"(U.S.) retail sales are looking quite grim," said Eric Lascelles, chief economics and rates strategist at TD Securities.
"The minus 2.2 percent is just the tip of the iceberg there. There's such a breadth of weakness in the details of the report that just suggests the U.S. is going to be in a sustained decline and that's going to weigh on central bank rates, not just in the U.S. .., but in Canada as well."
The Canadian overnight Libor rate LIBOR01 was 2.4667 percent, down from 2.5583 percent on Thursday.
Thursday's CORRA rate CORRA= was 2.2460 percent, up slightly from 2.2437 percent on Wednesday. The Bank of Canada publishes the previous day's rate at around 9 a.m. daily.
The two-year bond rose 1 Canadian cent to C$101.65 to yield 1.919 percent. The 10-year bond climbed 65 Canadian cents to C$104.65 to yield 3.667 percent.
The yield spread between the two- and 10-year bond was 180 basis points, unchanged from the previous close.
The 30-year bond added C$1.00 to C$112.35 to yield 4.248 percent. In the United States, the 30-year Treasury yielded 4.228 percent. (Reporting by John McCrank; editing by Peter Galloway)
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