Market update

US tsys on the defensive this morn after yields reached two month lows yest after weak ISM (priced paid 44 vs 49 exp). 10Y 2bps higher @ 2.17, curve ~1bp steeper. WTI is ~1.6% higher after falling 4% yest, other metals higher as well. Core Euro bonds lower/curves flatter, EU periph spds unch except  Greece which is 10 bps narrower vs bunds. Canada playing catch up mode after holiday yest, Cda/US in ~5bps in 10s & 30s. This week is all about payrolls in the US as there is no Fed speak or tsy supply to deal with.

News headlines

  • Puerto Rico Defaults on Bond Payment (NYT) Puerto Rico defaulted on a $58 million bond payment on Monday, a risky move that seemed to intensify the pressure on creditors for broader debt renegotiation, but might also make future borrowing far more difficult.
  • China Dethroned as World’s Most Liquid Stock Market (Bloomberg) After Curbs China has lost its title as the world’s most liquid stock market as trading halts and regulatory efforts to curb bearish transactions drive away investors.
  • Pimco Gets Warning From SEC That Lawsuit Could Be Coming (WSJ) Bond giant Pacific Investment Management Co. said Monday that it could be sued by the country’s top securities regulator over how it valued assets in one of its most popular funds aimed at small investors.

Overnight markets

  • Overview: IG24 5Y 71.7/72 (-0.03), US 10yr note futures are down -0.12% at 127-21+, S&P 500 futures are down -0.12% at 2088.5, Crude oil futures are up +1.75% at 45.96, Gold futures are up +0.07% at $1090.2, DXY is down -0.20% at 97.299.

US Economic Data

  • ISM New York (July) will be release at 9:45 (last report: 63.1).
  • Factory orders are expected at 1.8% MoM in June versus -1.0% in May.
  • IBD/TIPP economic optimism is forecast at 47.8 in August 0.3 point lower than July (48.1).

Canadian Economic Data

  • RBC Canadian Manufacturing PMI will be released at 9h30am.
  • Bloomberg Nanos Canadian Confidence Index will be released today at 10:00am.



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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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