CANADA FX DEBT-C$ firms as equities rise, greenback falls

 * C$ rises to 98 U.S. cents

 * Bond prices mixed across curve

 TORONTO, Oct 21 (Reuters) - The Canadian dollar firmed
against its U.S. counterpart on Thursday as world stocks and
U.S. equity futures ticked higher and the U.S. dollar came
under broad selling pressure.

 Against a backdrop of nerves about political currency
machinations and caution about corporate earnings, investor
focus was on the Friday and Saturday meeting of Group of 20
finance and central bank chiefs in South Korea. It is expected
to try to reach agreement on a common path to manage currency,
trade and macroeconomic imbalances.

 "We're sort of middle in the pack for currencies," said
Mark Chandler, head of fixed income and currency strategy at
RBC Capital Markets. "A slightly weaker U.S. dollar this
morning, reflecting an improvement in equity markets."

 Chandler noted that somewhat positive reaction to the Bank
of Canada's Monetary Policy Report on Wednesday was helping to
put a bottom under the Canadian dollar.

 "I think it's helped prevent any erosion. Even though it
was unfair, what caught people's attention was the idea that
the Bank of Canada's forecast incorporated gradual tightening
... most of the rate hikes had been largely priced out
throughout the curve."

 After pausing on rates on Tuesday, the Canadian central
bank said in the MPR that it would have to consider any further
rate hikes carefully, given the patchy global recovery, a weak
U.S. outlook and expected curbs on Canadian growth. It also
said there was still considerable monetary stimulus in place.
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 Also supporting risk appetite, some fears about China's
recent rate hike ebbed after a batch of data showing a slowdown
in economic growth, albeit to a still healthy level, was taken
as a sign that there may not be a spate of future tightenings.
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 At 8:05 a.m. (1205 GMT), the Canadian dollar CAD=D4 stood
at C$1.0204 to the U.S. dollar, or 98.00 U.S. cents, up from
Wednesday's finish at C$1.0222 to the U.S. dollar, or 97.83
U.S. cents.

 On the data front, investors will be looking to Canadian
and U.S. leading indicators for September, U.S. jobless claims
and the Philadelphia Fed business index.

  Canadian bond prices were mixed across the curve. The
two-year bond CA2YT=RR was down 2 Canadian cents to yield
1.389 percent, while the 10-year bond CA10YT=RR gained 7
Canadian cents to yield 2.754 percent.

 "There are really no big movements in bond markets, at
least in North America," added Chandler.

 "The biggest event today would be mostly performance of
equities and if there are any statements regarding currencies
coming out of the G20."

 (Reporting by Claire Sibonney, Editing by Chizu Nomiyama)