* Canadian dollar falls 0.1 percent against the greenback
* Price of U.S. oil declines 2.3 percent
* Canadian bond prices trade mixed across a flatter yield curve
* Spread between 2- and 5-year yields turns negative
TORONTO, Dec 10 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Monday as oil prices declined and the spread between Canada's two- and five-year yields turned negative for the first time since September 2007.
The five-year yield fell 0.6 basis points below the two-year yield. A flat or inverted yield curve could reduce the incentive for banks to lend and hinder investment in the multi-year projects that tend to boost the speed at which an economy can grow. price of oil, one of Canada's major exports, fell in line with further declines in global stock markets, erasing the gains made last week when major producers agreed to cut their crude output from January. crude CLc1 prices were down 2.3 percent at $51.4 a barrel.
At 9:36 a.m. (1436 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent lower at 1.3342 to the greenback, or 74.95 U.S. cents. The currency, which touched on Thursday its weakest in nearly 18 months at 1.3445, traded in a range of 1.3294 to 1.3362.
The modest decline for the loonie came as the U.S. dollar .DXY rose against a basket of major currencies and as the British pound GBP= lost ground after British Prime Minister Theresa May abruptly decided to pull a parliamentary vote on her Brexit deal. loonie was paring some of its gains following stellar jobs data on Friday. Canada added a record number of jobs in November and the unemployment rate dipped to a new all-time low, a performance that analysts said should help ease the Bank of Canada's worries about a recent economic slowdown. Monday, the Canadian Mortgage and Housing Corporation (CMHC) said that the seasonally adjusted annualized rate of Canadian housing starts increased to 215,941 units from a revised 206,753 units in October. Economists had expected starts to fall to 198,000. separate data, the value of Canadian building permits edged down by 0.2 percent in October from September, Statistics Canada said. government bond prices were mixed across a flatter yield curve, with the two-year CA2YT=RR price down 1.5 Canadian cents to yield 2.01 percent and the 10-year CA10YT=RR rising 10 Canadian cents to yield 2.063 percent.