CANADA FX DEBT-C$ clings to recent range, supported by trade deal hopes

    * Canadian dollar trades near flat against the greenback
    * Loonie touches an eight-day low at 1.3197
    * Price of U.S. oil increases 1.5%
    * Canadian bond prices fall across a steeper yield curve

    TORONTO, Nov 7 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday, recovering
from an earlier eight-day low as domestic jobs data loomed and
Beijing signaled a 'phase one' trade deal with the United States
was close to being sealed.
    Global shares rose and bond yields climbed after China's
commerce ministry said the world's two economic giants were
working on a deal that would roll back trade tariffs in
different stages.             
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from an improved outlook for global
    U.S. crude oil futures        were up 1.5% at $57.20 a
barrel as hopes rose for an end to a long dispute that has
weighed on economic growth and fuel demand.             
    At 8:50 a.m. (1350 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3177 to the greenback, or 75.89
U.S. cents. The currency's strongest level of the session was
1.3160, while it touched its weakest since Oct. 30, the day of a
Bank of Canada interest rate announcement, at 1.3197.
    Canada's employment report for October is due on Friday,
which could help guide expectations for the Bank of Canada's
policy outlook.
    The central bank last week left the door open to a possible
rate cut over the coming months to help the economy weather the
damaging effects of global trade conflicts.             
    Still, the Canadian dollar will edge higher over the coming
12 months, supported by the solid performance of Canada's
economy and its high yield relative to other major currencies, a
Reuters poll showed.                 
    Canadian government bond prices were lower across an steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 4.5 Canadian cents to yield 1.62% and the
10-year             was down 59 Canadian cents to yield 1.604%.
    The inversion of Canada's yield curve, a traditional
harbinger of recession, receded. The gap between the 2- and
10-year yields narrowed by 3.9 basis points to a spread of 1.6
basis points in favor of the shorter-dated bond, which was the
smallest gap since July 29.
    The Canadian province of Ontario, the world's biggest
sub-sovereign debtor, kept its focus on spending restraint in a
budget update on Wednesday that included a small business tax
break and cut the deficit forecast for the current fiscal year.

 (Reporting by Fergal Smith; Editing by Andrea Ricci)