Market Update
Tsys higher, yields 2-3 bps lower with the 10Y 2.08%, prices rising with German bunds after ECB decision to leave rates unchanged as expected. According to Bloomberg survey, many analysts had expected a change in forward guidance which was not the case, hence the uptick in bunds. European stocks higher, thou trailing off since mid morning, S&P futures unch. GOC yields diverging from tsys for a second day after yesterday’s surprise BOC rate hike, yields ~3bps higher across the curve.
News headlines
Stocks Gain With Euro Before ECB; Dollar Declines: Markets Wrap (Bloomberg) Stocks in Europe gained and the euro strengthened as investors awaited the latest policy guidance from the region’s central bank. The dollar weakened as North Korea tensions and the increasingly cloudy Fed outlook outweighed positive sentiment from the U.S. debt ceiling extension.
Euro grinds higher before ECB, global stocks stutter (Reuters) The euro climbed and stocks inched higher on Thursday, as markets waited to hear just how close the European Central Bank is to scaling back its more than 2 trillion euro ($2.75 trillion) stimulus program.
Oil dips on fears Hurricane Irma could hit crude shipments, rising Libya output (Reuters) Oil prices dipped on Thursday over fears that Hurricane Irma in the Caribbean could interrupt crude shipments in and out of the United States, and as Libyan output began to recover from disruptions.
Big banks raise consumer lending rates after Bank of Canada hike (Financial Post) Canada’s big banks will raise their prime lending rates to 3.2 per cent, effective Thursday, after the Bank of Canada boosted its trendsetting policy rate. The Bank of Canada on Wednesday raised its target policy rate by 25 basis points to 1.0 per cent from 0.75 per cent.
Hudson’s Bay explains weak second-quarter earnings as U.S. investor cries foul (Financial Post) Hudson’s Bay Co. is better off than some traditional department stores as it cuts costs, revamps its stores and invests in its expanding web operations, company executives told investors made skittish by widespread industry weakness.
Exxon CEO says Harvey had bigger impact on Mexico operations: CNBC (Reuters) Exxon Mobil Corp Chief Executive Darren Woods told CNBC on Thursday that Hurricane Harvey had a bigger impact on the company’s Mexico operations, and said that Irma had not impacted any of the oil major’s offshore operations yet.
Overnight markets
Overview: US 10yr note futures are up 0.172% at 127-10, S&P 500 futures are down 0% at 2463.75, Crude oil futures are down -0.96% at $48.69, Gold futures are up 0.41% at $1344.5, DXY is down -0.45% at 91.877, CAD/USD is down -0.49% at 0.8219.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.482% | 2 Year | 1.286% |
| 5 Year | 1.697% | 5 Year | 1.659% |
| 10 Year | 1.971% | 10 Year | 2.087% |
| 30 Year | 2.356% | 30 Year | 2.707% |
US Economic Data
| 8:30 AM | Initial Jobless Claims, Sep 2, 298k, est. 245k (prior 236k) |
| Continuing Claims, Aug 26, 1940k, est. 1945k (prior 1942k,revised 1945k) | |
| Nonfarm Productivity, 2Q F, 1.5%, est. 1.3% (prior 0.9%) | |
| Unit Labor Costs, 2Q F, 0.2%, est. 0.3% (prior 0.6%) | |
| 9:45 AM | Bloomberg Consumer Comfort Index, Sep 3, (prior 53.3) |
Canadian Economic Data
| 8:30 AM | Building Permits, m/m, Jul, -3.5%, est. -1.5% (prior 2.5%, revised 4.4%) |
| 10:00 AM | Ivey Purchasing Managers, Aug, (prior 60.0) |
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