CANADA FX DEBT-C$ treads water as oil prices rise

    * Canadian dollar at C$1.3157, or 76.01 U.S. cents
    * Price of U.S. oil rises 0.4 percent
    * Bond prices lower across the yield curve

    TORONTO, Sept 10 (Reuters) - The Canadian dollar steadied
against its U.S. counterpart on Monday, trading in a narrow
range as oil prices rose and the greenback slipped against a
basket of currencies.
    The price of oil, one of Canada's major exports, rose as
U.S. drilling stalled and investors anticipated lower supply
once new U.S. sanctions against Iran's crude exports kick in
from November.             
    U.S. crude        prices were up 0.4 percent at $68.04 a
barrel, while the U.S. dollar        was unable to build on its
gains from last week as a drop in Italian bond yields helped
boost the euro       .
    The greenback was boosted on Friday by strong U.S. jobs
data, while investors have been jittery about a possible
escalation of the U.S.-Chinese trade conflict after U.S.
President Donald Trump threatened China with more tariffs.
    The Canadian economy unexpectedly shed over 50,000 jobs in
August due to losses in part-time work, Statistics Canada data
showed on Friday, but investors still expected the Bank of
Canada to raise interest rates next month.             
    At 9:20 a.m. (1320 GMT), the Canadian dollar          was
trading nearly unchanged at C$1.3157 to the greenback, or 76.01
U.S. cents.
    The currency, which touched on Thursday its weakest in
nearly seven weeks at C$1.3226, traded in a range of C$1.3155 to
    Speculators have raised bearish bets on the Canadian dollar,
data from the U.S. Commodity Futures Trading Commission and
Reuters calculations showed on Friday. As of Sept. 4, net short
positions had increased to 26,307 contracts from 24,789 a week
    Canada must end its low-price milk proteins policy to reach
a U.S.-Canadian deal to update the North American Free Trade
Agreement, U.S. Agriculture Secretary Sonny Perdue said in an
interview aired on Sunday on C-SPAN television. [nL2N1VV080}
    Talks on NAFTA are expected to resume after U.S. Trade
Representative Robert Lighthizer travels to Brussels for trade
talks with European Union trade commissioner Cecilia Malmstrom
on Monday.        
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 0.5 Canadian cent to
yield 2.111 percent and the 10-year             falling 6
Canadian cents to yield 2.295 percent.
    The 10-year yield touched its highest intraday since Aug. 30
at 2.312 percent.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)