* Canadian dollar bounces off overnight low

* Traders await U.S. crude inventories data

* Bond prices all lower ahead of domestic auto sales

By Frank Pingue

TORONTO, July 2 (Reuters) - The Canadian dollar rose versus
a weaker U.S. dollar on Wednesday after a soft U.S. jobs report
rattled the greenback, but the domestic currency's moves were
expected to be volatile in illiquid markets.

Domestic bond prices were pinned lower across the curve as
dealers positioned themselves ahead of domestic auto sales data
for June that are expected to outperform the U.S. numbers that
arrived earlier this week.

At 9:30 a.m. (1330 GMT), the Canadian unit was at C$1.0150
to the U.S. dollar, or 98.52 U.S. cents, up from C$1.0228 to
the U.S. dollar, or 97.77 U.S. cents, which it tumbled to in
the overnight session.

The Bank of Canada did not provide an official closing rate
for the Canadian dollar on Tuesday because of the Canada Day
holiday. The currency closed at C$1.0197 to the U.S. dollar, or
98.06 U.S. cents, on Monday.

Much of the latest gains in the Canadian dollar were due to
a weaker U.S. dollar after data from south of the border showed
the U.S. private sector shed more jobs than expected.

That paved the way for the currency to rise to C$1.0143 to
the U.S. dollar, or 98.59 U.S. cents, well off the low to which
it fell overnight.

But with no major domestic data due out for the rest of the
week, traders will pay more attention to the weekly report on
U.S. crude inventories, due out later on Wednesday morning.

The Canadian dollar is often influenced by sharp moves in
commodity prices since it is a key exporter of oil and gold,
and the inventory report could impact oil prices.

"We saw last week the oil market was very sensitive to the
crude oil inventory, so that is an important risk event for the
Canadian dollar today," said Matthew Strauss, senior currency
strategist at RBC Capital Markets.

"Apart from that, from the domestic side obviously there is
nothing until next week so the Canadian dollar will take its
cue from commodities and the U.S dollar."

Market conditions are expected to remain illiquid for the
remainder of the week as U.S. financial markets will be closed
on Friday for Independence Day.

BONDS STUCK LOWER

Canadian bond prices were all lower as dealers speculated
the monthly sales figures from Canadian automakers would be
much better than the U.S. figures from Tuesday that showed
sales plunged to a 15-year low in June.

"U.S. auto sales for June came in quite week, a lot weaker
than markets expected and there's probably a sense that
Canadian auto sales that are released through the day will come
in miles above the U.S. numbers," said Sal Guatieri, senior
economist at BMO Capital Markets. "So maybe the bond market is
playing off those figures."

The only piece of data still due out in Canada this week
will be Friday's Ivey Purchasing Managers Index for June, which
is prone to sharp moves since it is not seasonally adjusted.

Ivey data is expected to show purchasing activity in the
Canadian economy rose in June but at a slightly slower pace
than in the previous month.

The two-year bond was down 4 Canadian cents at C$100.89 to
yield 3.264 percent. The 10-year bond dropped 23 Canadian cents
to C$101.72 to yield 3.770 percent.

The yield spread between the two-year and 10-year bond was
50.6 basis points, up from 49.7 at the previous close.

The 30-year bond slipped 36 Canadian cents to C$115.09 for
a yield of 4.104 percent. In the United States, the 30-year
Treasury yielded 4.521 percent.

The three-month when-issued T-bill yielded 2.56 percent,
down from 2.57 percent at the previous close.

(Reporting by Frank Pingue;; Editing by Scott Anderson)