Market Update
Tsys slightly higher having given up earlier gains on weakness in equities (Deutsche Bank news, Fed repricing) to trade close to lows of session, 10Y 2.03% on avg volume in TY futures (380k). Core Euro bonds higher led by 10Y UK gilts 0.695% (-4bps) – Boris Johnson saying the UK will leave the EU without a deal by the Oct 31st deadline. GOCs continuing lower, curve flatter, another 2bps wider vs tsys, despite headline weakness in Cdn employment the details were strong- full time employment up 25k and wages +3.6%, the CAD close to six month highs from Friday @ 1.3050. BOC not expected to adjust its bias in favor of easing at this week’s meeting yet could boost the outllook for Q2 growth and inflation given the improvement in recent data.
News headlines
U.S. Futures, Europe Stocks Struggle; Gold Climbs: Markets Wrap (Bloomberg) U.S. equity futures edged lower and Europe stocks drifted following steep declines in Asia as investors kicked off the busy week in a cautious mood. Gold advanced.
TSX futures lower as U.S. rate cut hopes fade (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Monday, as investors scaled back expectations for a hefty rate cut by the U.S. Federal Reserve.
Poloz’s comfort level with stronger loonie faces a test (BNN) Bank of Canada Governor Stephen Poloz may have reason to start worrying about the strengthening Canadian dollar when he sets interest rates this week.
Oil Holds Above $57 as Iran Tension Keeps Investors Wary (Bloomberg) Oil held above $57 as rising tension in the Middle East kept investors wary of potential supply disruptions.
Global shares muted as prospect of sharp U.S. rate cut fades (Reuters) Global shares were in a muted mood on Monday after strong U.S. job gains tempered expectations the Federal Reserve will deliver a large rate cut, but Deutsche Bank gained nearly 4% as it launched a major restructuring.
EU working to get European candidate to replace Lagarde at IMF, official says (Reuters) The European Union wants to have an agreed European candidate to replace Christine Lagarde at the helm of the International Monetary Fund, a senior EU official said on Monday.
German Industry Gets Some Relief as Production Rises in May (Bloomberg) German industrial production saw a slight pick-up in May — a rare sign of resilience as manufacturers in Europe’s largest economy struggle with global trade tensions and subdued demand.
Market Overview: US 10yr note futures are up 0.037% at 127-17, S&P 500 futures are down -0.22% at 2984, Crude oil futures are down -0.19% at $57.4, Gold futures are up 0.51% at $1407.2, DXY is up 0.02% at 97.306, CAD/USD is down -0.13% at 0.7656.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.633% | 2 Year | 1.87% |
| 5 Year | 1.542% | 5 Year | 1.834% |
| 10 Year | 1.575% | 10 Year | 2.037% |
| 30 Year | 1.742% | 30 Year | 2.538% |
US Economic Data
| 03:00 PM | Consumer Credit, May Survey: $17.000b Prior: $17.497b |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Jul 5 Survey: — Prior: 58.3 |
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