Market Update
Tsy yields higher ahead of June payrolls, 10Y 1.97% (+2bps), on avg volume in TY futures (335k). Core EGBs also lower, 10Y bund -0.39% vs -0.41% record intraday low yest. Main European data was German factory orders which declined 2.2% m/m vs -0.2% exp. GOCs lower before June Cdn employment (10k exp vs 27.7k in May). Can/US spreads another 1-2bps wider yest, GOCs continuing their underperformance in the face of divergent economic indicators.
News headlines
Stocks Slip Ahead of U.S. Jobs Data; Dollar Gains: Markets Wrap (Bloomberg) U.S. stock futures were lower along with Treasuries before the key U.S. jobs report. The dollar strengthened and crude oil fell.
TSX futures lower ahead of U.S. jobs data (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Friday ahead of the release of a crucial U.S. jobs report, which could offer some guidance on the U.S. Federal Reserve’s interest rate decision due later this month.
Oil Set for Weekly Decline as Economic Woes Eclipse OPEC Curbs (Bloomberg) Oil is set for the biggest weekly decline since May as global demand concerns outweighed an OPEC+ pact to extend supply curbs into 2020 and worries that a renewed confrontation with Iran may threaten supplies.
Sinking yields puts euro on track for biggest weekly drop in 3 weeks (Reuters) The euro fell a fifth of a percent against the dollar on Friday and is set for its biggest weekly drop in three weeks as a relentless slide in government bond yields forced investors to look for higher-yielding assets elsewhere.
Venezuela says U.S. sanctions hit debt refinancing, oil sales (Reuters) Venezuela charged on Friday that U.S.-led sanctions had stopped foreign debt refinancing, blocked vital food and medicine imports, and cost billions of dollars in lost oil assets.
UK economy shows slowdown signs as recruiters, shoppers turn wary (Reuters) British employers and shoppers are turning increasingly cautious, indicators showed on Friday, suggesting two of the drivers of the economy during the Brexit crisis are losing momentum.
World stocks cling to gains, bonds hover ahead of U.S. payrolls (Reuters) World stocks clung to their 17-month highs on Friday and bonds paused after this week’s rally ahead of U.S. jobs data, a gauge that could stoke or temper market expectations about aggressive policy easing by the Federal Reserve.
Market Overview: US 10yr note futures are down -0.134% at 128-03, S&P 500 futures are down -0.17% at 2995, Crude oil futures are down -0.8% at $56.88, Gold futures are down -0.5% at $1413.8, DXY is up 0.18% at 96.942, CAD/USD is up 0.1% at 0.7653.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.546% | 2 Year | 1.786% |
| 5 Year | 1.451% | 5 Year | 1.758% |
| 10 Year | 1.495% | 10 Year | 1.967% |
| 30 Year | 1.684% | 30 Year | 2.478% |
US Economic Data
| 08:30 AM | Change in Nonfarm Payrolls, Jun Survey: 160k Prior: 75k |
| Change in Private Payrolls, Jun Survey: 150k Prior: 90k | |
| Change in Manufact. Payrolls, Jun Survey: 3k Prior: 3k | |
| Unemployment Rate, Jun Survey: 3.60% Prior: 3.60% | |
| Average Weekly Hours All Employees, Jun Survey: 34.4 Prior: 34.4 | |
| Labor Force Participation Rate, Jun Survey: 62.80% Prior: 62.80% | |
| Underemployment Rate, Jun Survey: — Prior: 7.10% |
Canadian Economic Data
| 08:30 AM | Net Change in Employment, Jun Survey: 9.9k Prior: 27.7k |
| Unemployment Rate, Jun Survey: 5.50% Prior: 5.40% | |
| Participation Rate, Jun Survey: 65.70 Prior: 65.70 | |
| Full Time Employment Change, Jun Survey: — Prior: 27.7 | |
| Part Time Employment Change, Jun Survey: — Prior: 0.0 | |
| 10:00 AM | Ivey Purchasing Managers Index SA, Jun Survey: — Prior: 55.9 |
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, Émile Bordeleau
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230