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Bonds News

CANADA FX DEBT-Canadian dollar rallies after positive COVID-19 vaccine news

    * Canadian dollar rises 0.4% against the greenback
    * Canadian manufacturing sales rise 1.5% in September
    * Price of U.S. oil increases 4.6%
    * Canadian bond yields rise across much of a steeper curve

    By Fergal Smith
    TORONTO, Nov 16 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Monday as positive results from
a COVID-19 vaccine trial boosted investor sentiment and domestic
data showed manufacturing sales climbing in September.
    Wall Street        rallied after Moderna Inc          said
its experimental vaccine was 94.5% effective in preventing
COVID-19 based on interim data from a late-stage trial. It was
the second U.S. company in a week to report positive results
from a trial.             
    Canada runs a current account deficit and is a major
producer of commodities, including oil, so the loonie tends to
be sensitive to the global flow of trade and capital.
    U.S. crude        prices were up 4.6% at $41.99 a barrel,
while the Canadian dollar        was trading 0.4% higher at
1.3080 to the greenback, or 76.45 U.S. cents.
    The currency traded in a range of 1.3065 to 1.3141. Last
week, it fell 0.6% as global coronavirus cases climbed.
    Canadian factory sales increased by 1.5% in September from
August on higher sales in the wood industry, as well as the
chemical industry, Statistics Canada said.             
    "Conditions in the factory sector have improved rapidly
since Q2 (the second quarter)," said Ryan Brecht, a senior
economist at Action Economics. "Producers face remarkably lean
inventories and rebounding demand in many industries above
pre-pandemic levels."
    Separate data, from the Canadian Real Estate Association,
showed that Canadian home sales fell 0.7% in October from
September, edging back from the previous month's all-time
record.             
    Canadian government bond yields were higher across much of a
steeper curve in sympathy with U.S. Treasuries, with the 10-year
yield             up 2 basis points to 0.748%. On Friday, it
touched its highest intraday level in seven months at 0.813%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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