CANADA FX DEBT-C$ inches up with oil support, bonds mixed
* C$ edges up to 97.18 U.S. cents
* Bonds mixed
* Growth in Canada factory sales, productivity slows (Updates to late morning)
By Ka Yan Ng
TORONTO, June 15 (Reuters) - The Canadian dollar held higher against the U.S. currency on Tuesday late morning on firmer energy prices, while strong demand for European debt gave anxious investors some relief about the euro zone's finances.
North American stock markets were higher following strength in overseas equity markets, whetting investor appetite for riskier assets. [.N] [.TO]
Solid demand at debt auctions in Spain, Ireland and Belgium kept the euro higher and offset a weak German ZEW investor sentiment survey. [FRX/] [ID:nLDE65E0WQ] [ID:nWLA6316] [ID:nTAR001853]
At 11:20 a.m. (1520 GMT), Canada's dollar was at C$1.0290 to the U.S. dollar, or 97.18 U.S. cents, up from C$1.0325 to the U.S. dollar, or 96.85 U.S. cents, at Monday's close.
"We're more of a follower than a leader on the current move. This is more being driven by a resurgence in European currencies," said Shane Enright, executive director at CIBC World Markets.
Oil prices stood about 2 percent higher, while natural gas rose about 1.6 percent, adding to gains from the previous session. The Canadian dollar's movements are often influenced by commodity prices. [O/R]
"Ultimately these things are supportive for the Canadian dollar. I still see room for the Canadian dollar to run a little bit stronger but thus far today it's been quiet," said Enright.
The day's domestic data hardened expectations that second-quarter economic growth will be less robust than in the previous two quarters, but not bad enough to derail expectations that the Bank of Canada will continue to raise interest rates. [ID:nN15258387]
Growth in Canadian manufacturing sales slowed in April and productivity came in lower than expected in the first quarter.
BONDS MILDLY MIXED
Canadian bond prices were mixed across the curve and against U.S. Treasuries, which were mostly flat as talk of enduring dovishness in U.S. monetary policy competed with signs of renewed risk appetite. [US/]
The two-year government bond CA2YT=RR was off 2 Canadian cents to yield 1.818 percent, while the 10-year bond CA10YT=RR edged up 19 Canadian cents to yield 3.409 percent.
In debt offerings, Quebec sold C$500 million of six-year notes in a reopening of an existing 3.50 percent issue, while Canada Housing Trust on Tuesday sold C$5.5 billion of five-year notes due June 15, 2015, according to term sheets seen by Reuters. [ISU-CAN]
(Reporting by Ka Yan Ng;editing by Mario Di Simine )
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