CANADA FX DEBT-C$ flat as stocks mixed, U.S. data eyed

Mon Jul 26, 2010 8:28am EDT
 
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 * C$ flat at 96.53 U.S. cents
 * Bond prices edge lower
 By Claire Sibonney
 TORONTO, July 26 (Reuters) -  The Canadian dollar traded
sideways against its U.S. counterpart on Monday, lacking
significant direction as equities were mixed ahead of key U.S.
economic data.
 U.S. stock index futures were flat in advance of new home
sales figures later in the morning, while the euro, a recent
proxy for risk appetite, erased early gains as caution set in
folling Friday's release of European banks' stress test
results. [.N] [FRX/]
 "I think we'll probably see the equity risk sentiment
correlation moving around a bit," said Sacha Tihanyi, currency
strategist at Scotia Capital.
 "The futures market in the U.S. is kind of oscillating
between gains and losses, not showing us too strong a
direction. Europe is kind of mixed so I think it's just a
yet-to-be decided kind of sentiment day."
 Looking to the new home sales, due at 10 a.m. (1400 GMT),
economists in a Reuters survey forecast a total of 320,000
annualized units in June compared with 300,000 in May.
 "It's always going to be a driver particularly of late when
we've seen some weakness in the U.S. data and worries about the
home sales market ... perhaps just something in the positive
territory will be reasonably constructive for risk," added
Tihanyi.
 The next big data events will be domestic and U.S. GDP on
Friday.
 At 8:10 a.m. (1210 GMT), the Canadian currency CAD=D4 was
at C$1.0360 to the U.S. dollar, or 96.53 U.S. cents, up from
Friday's close at C$1.0361 to the U.S. dollar, or 96.52 U.S.
cents.
 In the short term, key levels to test were seen at C$1.0330
and C$1.0440.
 Canadian bond prices edged slightly lower as U.S.
Treasuries inched higher and outperformed benchmark euro zone
debt as investors looked past European bank stress tests and
focused on the gloomy economic picture. [US/]
 The two-year bond CA2YT=RR was 1 Canadian cent lower to
yield 1.592 percent, while the 10-year bond CA10YT=RR was
down 3 Canadian cents to yield 3.231 percent.
 (Reporting by Claire Sibonney; Editing by Theodore d'Afflisio)