Market Update
US treasuries racing to new highs, yields another 3.5- 7.5bps lower with the 10Y 1.625% (-7.5bps), new three year low, on strong volume in TY futures (650k), strong buying in TYU in last hr. Chinese yuan weakening again above 7.0 after the PBOC raised the fixing rate for USDCNY, 10Y German bund moving to new low -0.60%, 2s30s bund curve narrowest since financial crisis – German Ind prod fell to the lowest level since 2009 y/y, expectations of ECB easing continue to build. In Canada, GOCs leading the US in the rally, Can/US 2-3bps tighter, weaker crude adding to the impetus to cover shorts in Can/US.
News headlines
U.S. Stock Futures Turn Lower as Bonds Advance: Markets Wrap (Bloomberg) U.S. equity-index futures reversed a gain and bonds rallied globally after a series of dovish central-bank surprises underscored growing concern over the outlook for growth.
Futures turn lower as investors flock to bonds, gold (Reuters) U.S. stocks futures turned lower on Wednesday after investors flocked to safe-haven gold and U.S. government bonds amid worries over the escalation in U.S.-China trade war denting global growth.
CANADA STOCKS-TSX futures rise on firmer gold prices (Reuters) Canada’s main stock index futures edged higher on Wednesday, supported by a climb in gold prices as cautious investors remained wary of riskier assets.
‘Scary’ German output figures propel recession fears (Reuters) German industrial output fell more than expected in June driven by weaker production of intermediate and capital goods, in a further sign that Europe’s biggest economy contracted in the second quarter as exporters get caught in trade disputes.
U.S. dollar: When will bulls turn to bears? (Reuters) Trump wants it to be cheaper. The IMF says it should be cheaper. Hedge funds think it has room to run. So what gives with the dollar?
Asian central banks flag growth concerns with surprising rate cuts (Reuters) Asia central banks signaled major concerns on Wednesday about the outlook for economic growth, stunning markets with a series of surprising interest rate cuts and pointing to policymakers’ dwindling ammunition to fight off a downturn.
U.S. labeling China a currency manipulator is groundless, China FX regulator (Reuters) The United States’ labeling of China as a currency manipulator has no grounds and does not accord with facts, China’s foreign exchange regulator said, the official Xinhua News Agency reported on Wednesday.
Market Overview: US 10yr note futures are up 0.506% at 130-14, S&P 500 futures are down -0.16% at 2871.5, Crude oil futures are down -0.73% at $53.24, Gold futures are up 1.64% at $1508.6, DXY is down -0.01% at 97.622, CAD/USD is up 0.19% at 0.7515.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.3% | 2 Year | 1.559% |
| 5 Year | 1.149% | 5 Year | 1.467% |
| 10 Year | 1.164% | 10 Year | 1.643% |
| 30 Year | 1.437% | 30 Year | 2.165% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, Aug 2 Survey: — Actual: 5.30% Prior: -1.40% |
| 03:00 PM | Consumer Credit, Jun Survey: $16.100b Prior: $17.086b |
Canadian Economic Data
| 10:00 AM | Ivey Purchasing Managers Index SA, Jul Survey: — Prior: 52.4 |
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