CANADA FX DEBT-C$ hits 2-week low as global trade tensions rise

    * Canadian dollar dips 0.1% against the greenback
    * Loonie touches its weakest since April 25 at 1.3505
    * Canada's trade deficit narrows to C$3.21 billion in March
    * Canadian bond prices rise across a flatter yield curve

    TORONTO, May 9 (Reuters) - The Canadian dollar weakened to a
two-week low against the greenback on Thursday as domestic data
showed a wider-than-expected trade deficit and as investors
feared the trade dispute between the United States and China
could escalate.
    Global equities          slumped to a more than five-week
low after U.S. President Donald Trump ratcheted up trade
tensions with China ahead of a high-stakes negotiation.
    Canada runs a current account deficit and exports many
commodities, including oil, so its economy could be hurt by a
slowdown in the global flow of capital or trade.
    Canada's trade deficit in March shrank slightly to C$3.21
billion as higher energy shipments helped exports increase at a
slightly faster rate than imports, Statistics Canada said. The
deficit was greater than the C$2.45 billion shortfall that
analysts had predicted.                     
    The price of oil fell as worries about the U.S.-China trade
dispute counteracted a surprise decline in U.S. crude
inventories. U.S. crude oil futures        were down 0.90% to
$61.56 a barrel.             
    At 9:17 a.m. (1317 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3498 to the greenback, or 74.09 U.S.
cents. The currency touched its weakest intraday level since
April 25 at 1.3505.
    Separate data showed that new housing prices in Canada were
unchanged in March for the seventh month out of eight, with
little or no growth in the major markets of Toronto and
    Canada's jobs report for April is due on Friday.
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 5.5 Canadian cents to yield 1.569% and the
10-year             climbed 41 Canadian cents to yield 1.663%.

 (Reporting by Fergal Smith; Editing by David Gregorio)