07/09/2018

News headlines

Nafta Deal Unlikely This Week, Talks to Resume Friday (Bloomberg) A Nafta deal doesn’t look likely this week. Talks between the U.S. and Canada have seemed upbeat, but are not expected to lead to a deal this week, a Canadian government official said, speaking on condition of anonymity. The pace of meetings between U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland has slowed since last week, as both countries look to be squaring off. The Trump administration gave notice Aug. 31 of intent to sign a deal that could include Canada. Freeland has said there’s progress, but that no deal is done until it’s done. The officials will not be able to work through the weekend into the new week because Lighthizer is scheduled to meet his European counterpart in Brussels Monday.

Trump’s Loyalty Demands Met by ‘Treason’ Within His Inner Circle (Bloomberg) President Donald Trump is facing another set of revelations that call into question the loyalty of his inner circle, this time within the White House. Last month, two longtime business confidants struck cooperation deals with federal prosecutors, potentially trading information on Trump’s dealings for better treatment. Now, Watergate investigative reporter Bob Woodward’s book detailing a chaotic West Wing and former staffers actively deceiving and undermining Trump, coupled with an anonymous op-ed in the New York Times describing senior administration officials’ attempts to thwart the president, has further undermined his trust in his staff.

Bank of Canada Debated Whether to Accelerate Rate Hikes (Bloomberg) The Bank of Canada’s top officials debated whether to accelerate the pace of potential interest rate hikes, before finally choosing to stick to their current “gradual” path. In a speech Thursday outlining some of the deliberations from yesterday’s rate decision, Senior Deputy Governor Carolyn Wilkins said the issue came up in the governing council’s discussions because Canada’s economy is running near capacity and is at the stage of the business cycle where the focus turns to combating price increases.

Stocks Decline on Tariff Suspense; Dollar Steady: Markets Wrap (Bloomberg) S&P 500 Index futures fell along with European shares as investors awaited the latest move in the U.S.-China trade war, as well as key payroll data from the world’s biggest economy later Friday. Emerging-market equities snapped seven days of declines while a gauge of currencies also rose. U.S. equity futures pointed to a softer open as the Stoxx Europe 600 Index slipped, heading for its worst week since March, following a mostly negative session in Asia. Equities fell in Japan, South Korea and Australia, while those in China posted gains. Technology shares lagged behind, following their U.S. counterparts lower amid concern about the durability of chip demand.

China to increase export tax rebates on 397 products (Reuters) China said on Friday it will increase export tax rebates for 397 items ranging from some steel products to electronic ones, in a bid to boost prospects for shipments amid its trade war with the United States. The move comes as word is widely awaited on whether U.S. President Donald Trump will impose tariffs on another $200 billion of imports from China. A public consultation period in Washington on the proposal has just ended.

Short seller Andrew Left suing Musk, Tesla for inflating stock price (BNN) Citron Research founder Andrew Left, an activist short-seller known among other things for calling beleaguered drug company Valeant a “pharmaceutical Enron,” is suing Tesla Inc. () and Chairman Elon Musk for inflating the company’s stock price. In his lawsuit, Left seeks to represent a class of investors who traded Tesla shares from Aug. 7 to Aug. 17. The suit cites Musk’s “long-standing public feud with short-sellers,” claiming he manipulated the price of Tesla securities to hurt such investors — and in so doing damaged all buyers of the company’s shares by issuing false and misleading information.

Delta jet-engine failure at 18,000 feet draws U.S. safety probe (BNN) U.S. safety regulators are investigating an engine failure on a Delta Air Lines Inc. () jet that forced pilots to shut down the turbine and return to Atlanta shortly after takeoff. The accident occurred Wednesday on a Boeing Co. () 757-200 bound for Orlando, Florida, the National Transportation Safety Board said Thursday on Twitter. Delta Flight 1418, which had 121 passengers and six crew members, landed safely and there were no injuries. The engine failure occurred at about 18,000 feet, according to the Federal Aviation Administration. 

Overnight markets

Overview: US 10yr note futures are down -0.065% at 120-03, S&P 500 futures are down -0.17% at 2874, Crude oil futures are up 0.06% at $67.81, Gold futures are up 0.2% at $1206.7, DXY is down -0.04% at 94.987, CAD/USD is down -0.2% at 0.7624.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	2.086%	2 Year	2.645%
5 Year	2.183%	5 Year	2.757%
10 Year	2.25%	10 Year	2.888%
30 Year	2.263%	30 Year	3.067%

US Economic Data

8:30 AM	Change in Nonfarm Payrolls, Aug est 190k (157k prior)
	Change in Private Payrolls, Aug est 194k (170k prior)
	Change in Manufact Payrolls, Aug est 23k (37k prior)
	Unemployment Rate, Aug est 3.8% (3.9% prior)
	Average Hourly Earnings MoM, Aug est 0.2% (0.3% prior)
	Average Hourly Earnings YoY, Aug est 2.7% (2.7% prior)
	Average Weekly Hours All Employees, Aug est 34.5 (34.5 prior)
	Labor Force Participation Rate, Aug (62.9% prior)

Canadian Economic Data

8:30 AM	Net Change in Employment, Aug est 5.0k (54.1k prior)
	Unemployment Rate, Aug est 5.9% (5.8% prior)
	Hourly Earnings Permanent Empl YoY, Aug est 3.0% (3.0% prior)
	Full Time Employment Change, Aug est 35.0k (-28.0k prior)
	Part Time Employment Change, Aug est -30.0k (82.0k prior)
	Participation Rate, Aug est 65.5 (65.4 prior)
10:00 AM	Ivey Purchasing Managers Index SA, Aug (61.8 prior)