Market Update

US tsys volatile after July ADP +178k vs 190k exp (June revised to 191k from 158k) and  tsy refunding announcement – $62bln in 3, 10 & 30Y notes as expected, notably the Treasury made no mention of ultra-long bonds in the statement which is giving the mkt a bit of a lift – 30K TY lifted from 126-00 to 126-04, as flatteners  being put on according to MNI. GOCs lower , spds another 1-2bps tighter vs tsys after yesterday’s strong outperformance (2-3bps) led by the 7 to 10Y on strong buying in CGBs, provis opening unch in 5s, 0.5bps wider in 10s & longs

News headlines 

Commodity Dip, Euro Gain Hit Stocks; Gold Drops: Markets Wrap (Bloomberg) Miners weighed on Europe’s benchmark equity index as most industrial metals traded lower and a surge in the euro added a further headwind. Oil fluctuated after retreating from its brief rise above $50 a barrel.

Euro hits 2-1/2 year highs as warning signs grow (Reuters) The euro climbed to a fresh 2-1/2 year high against the dollar on Wednesday as investors added long bets in the single currency though some analysts advised caution as some signals such as interest rate differentials were flashing a warning sign.

Trump close to decision on addressing Chinese trade practices (Reuters) U.S. President Donald Trump is close to a decision on how to respond to what he considers China’s unfair trade practices, a senior Trump administration official said on Tuesday.

China issues rules to curb state firms’ overseas investment risks (Reuters) China’s finance ministry has issued guidelines on overseas investment of state-owned enterprises (SOEs), amid a campaign to tighten controls on outbound investment and financial risks.

Barclays leases more office space in Dublin ahead of Brexit (Reuters) Barclays (BARC.L) has signed a lease agreement for more office space in Dublin as the bank prepares to expand its operations in the Irish capital to cope with the impact of Britain’s exit from the European Union.

In Canada, a nation of realtors braces for the end of the boom (Reuters) Canada’s long housing boom has drawn thousands into the sector, from realtors and home stagers to construction workers, and a looming slowdown threatens to trigger an exodus that could wipe out many of those jobs and force the economy to shift down.

Overnight markets 

Overview: US 10yr note futures are down -0.136% at 126-01, S&P 500 futures are up 0.1% at 2474.75, Crude oil futures are down -0.12% at $49.1, Gold futures are down -0.79% at $1269.3, DXY is up 0% at 93.047, CAD/USD is up 0.23% at 0.7957.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.259% 2 Year 1.355%
5 Year 1.564% 5 Year 1.819%
10 Year 1.952% 10 Year 2.266%
30 Year 2.377% 30 Year 2.855%

US Economic Data

7:00 AM MBA Mortgage Applications, Jul 28, -2.8% (prior 0.4%)
8:15 AM ADP Employment Change, Jul, 178k, est. 190k (prior 158k, revised 191k)

Canadian Economic Data

There is no major economic data for today.

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230