* Canadian dollar falls 0.1% against the greenback
    * Price of U.S. oil trades near flat at $71.88 a barrel
    * Canadian bond yields ease across a flatter curve

    TORONTO, July 27 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday, as a sell-off in
China's stock market weighed on sentiment and a record low for
U.S. bond yields after adjusting for inflation signaled worries
about the economic outlook.
    World stocks          fell after investors sold Chinese
internet giants for a third straight day, while real U.S. bond
yields declined ahead of a Federal Reserve interest rate
decision on Wednesday, with some investors betting that the pace
of global economic recovery has peaked.             
    Canada is a major producer of commodities, including oil, so
its economy tends to be sensitive to the outlook for global
growth.
    U.S. crude        prices were little changed at $71.88 a
barrel, while the Canadian dollar        was trading 0.1% lower
at 1.2557 to the greenback, or 79.64 U.S. cents.
    Still, the currency has recovered from a five-month low last
week at 1.2807 when investors were rattled by the spread of the
Delta variant of the coronavirus.
    The Canadian Consumer Price Index report for June is set for
release on Wednesday, which will include updated weights for the
basket of goods and services used in the index. Shifts include a
higher weighting for the shelter component as housing prices
soar.             
    Canadian government bond yields were lower across a flatter
curve, tracking the move in U.S. Treasuries. The 10-year
            fell five basis points to 1.173% but held above the
five-month low hit last Tuesday at 1.104%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)