CANADA FX DEBT-C$ weakens to 1-week low as lower oil, risk aversion weigh

Published 2016-06-14, 10:18 a/m
© Reuters.  CANADA FX DEBT-C$ weakens to 1-week low as lower oil, risk aversion weigh
USD/CAD
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CME
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CA2YT=RR
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CA10YT=RR
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* Canadian dollar at C$1.2851, or 77.81 U.S. cents
* Loonie touched its weakest since June 6 at C$1.2873
* Bond prices mixed across flatter maturity curve
* 10-year yield hit its lowest since Feb. 24 at 1.078 pct

TORONTO, June 14 (Reuters) - The Canadian dollar weakened to
a one-week low against a broadly firmer U.S. counterpart on
Monday, as lower oil prices and market jitters about a potential
British exit from the European Union weighed on the
risk-sensitive commodity-linked currency.
Britain's "Leave" campaign opened up a 7-point lead over
"Remain" ahead of a referendum on membership in the European
Union, an opinion poll showed late Monday.
Global stocks were mostly lower and oil fell as investors
flocked to safe-haven assets.
At 9:59 a.m. EDT (1359 GMT), the Canadian dollar CAD=D4
was trading at C$1.2851 to the greenback, or 77.81 U.S. cents,
weaker than Monday's close of C$1.2807, or 78.08 U.S. cents.
The currency's strongest level of the session was C$1.2816,
while it touched its weakest since June 6 at C$1.2873.
Stronger-than-expected U.S. retail sales data added to
support for the greenback, suggesting economic growth was
gaining steam.
Still, chances of an interest rate increase by the U.S.
Federal Reserve on Wednesday remained low. The CME Group's (NASDAQ:CME)
FedWatch tool indicated just a 1.9 percent probability of a rate
hike.
In domestic data, the ratio of Canadian household
debt-to-income edged down to 165.3 percent in the first quarter
from 165.4 percent in the fourth quarter, Statistics Canada
said.
Separately, Canadian home prices rose in May from a month
earlier, and were well up from the year before, the
Teranet-National Bank Composite House Price Index showed.

Canadian government bond prices were mixed across a flatter
maturity curve as Germany's 10-year yield turned negative on the
flight-to-quality.
The two-year CA2YT=RR price dipped 0.5 Canadian cent to
yield 0.491 percent, while the benchmark 10-year CA10YT=RR
climbed 22 Canadian cents to yield 1.089 percent. The 10-year
yield hit its lowest since Feb. 24 at 1.078 percent.
The curve flattened, as the spread between the 2-year and
10-year yields narrowed by 2.6 basis points to 59.8 basis
points, indicating outperformance for longer-dated maturities.

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