950805

Canada bond

slightly up

TORONTO: Canadian bonds closed marginally higher, dragged up a bit by the U.S. market on the back of lower-than-expected July payroll figures, traders said on Friday.

Trading was slow ahead of Ontario's Civic Holiday on Monday, when financial markets will be closed, said Jeoff Hall, senior Canadian analyst with Thomson Technical Data.

"Canada was slightly underperforming the U.S. but on an uptick today," Hall said.

Canada's 9.0 percent of 2025 rose C$0.17 to C$102.24 with a yield of 8.785 percent, against the U.S. 30-year benchmark which increased to 6.90 for a spread of 189 basis points.

The market could extend its gains next week, Hall said, but dealers will focus on more economic data coming from the U.S. for near-term direction.

On Monday the U.S. will release June's consumer credit data, which is forecast to drop to US$10.8 billion from May's US$11.5 billion. However, the larger focus will be on Thursday's Producer Price Index and and Friday's Consumer Price Index for clues on where U.S. inflation is headed.

The market may also see a new issue from British Columbia, which had been expected as far back as the last week of July, Hall said.

Among other prices, Canada's 9.0 percent of 2004 rose C$0.01 at C$103.98 to yield 8.373 percent, compared to the U.S. 10-year benchmark which rose to 6.49 percent for a spread of 188 basis points.

At the front end of the curve, Canada's three-month cash T-bills traded at 6.64 percent against the U.S. three-month at 5.41 percent.-Reuter