CANADA FX DEBT-C$ climbs as oil price, Canadian home sales rise
* Canadian dollar at C$1.2908, or 77.47 U.S. cents * Bond prices lower across the maturity curve TORONTO, May 16 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Monday as oil rallied to new 2016 highs and after Canadian home sales rose in April to their highest level ever. Supportive of the commodity-linked currency, oil prices rose amid increasing output disruptions in Nigeria and after Goldman Sachs said a near-two-year glut in the market had ended and flipped to a deficit. U.S. crude prices were up 2.64 percent at $47.43 a barrel. Sales of existing Canadian homes rose 3.1 percent in April from March, a report from the Canadian Real Estate Association showed. At 9:22 a.m. EDT (1322 GMT), the Canadian dollar was trading at C$1.2908 to the greenback, or 77.47 U.S. cents, stronger than Friday's close of C$1.2935, or 77.31 U.S. cents. The currency's strongest level of the session was C$1.2902, while it touched its weakest since May 10 of C$1.2961. Last week, the loonie hit its weakest in one month of C$1.3016. News from Alberta, where some production had restarted at oil sands facilities following a wildfire, was offset by stronger-than-expected U.S. retail sales data and hawkish comments by U.S. Federal Reserve officials. Still speculators have increased bullish bets on the loonie, Commodity Futures Trading Commission data showed. Net long Canadian dollar positions rose to 25,874 contracts in the week ended May 10 from 18,943 contracts in the prior week. China's investment, factory output and retail sales all grew more slowly than expected in April, adding to doubts about whether the world's second-largest economy is stabilizing. China is one of the biggest customers for Canada's commodity exports. Canadian Prime Minister Justin Trudeau praised firefighters on Friday for defending the energy hub of Fort McMurray and promised the federal government would pour money in to its recovery. Canadian government bond prices were lower across the maturity curve in sympathy with U.S. Treasuries. The two-year price fell 2.5 Canadian cents to yield 0.564 percent and the benchmark 10-year declined 14 Canadian cents to yield 1.291 percent. The 10-year yield hit its lowest on Friday in more than three weeks at 1.265 percent. The Canada-U.S. two-year bond spread was 0.8 of a basis points more negative at -21.1 basis points, its largest gap since April 1, as U.S. Treasuries underperformed. Canadian manufacturing, wholesale trade and retail sales data for March and inflation data for April are awaited this week. (Reporting by Fergal Smith; Editing by Bernadette Baum)
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