Market Update
US tsys higher, yields 1-2bps lower, 10Y 1.72%, heavy volume in TY futures (570k). US equity futures higher, S&P sideways since early Asia trading (+8.5), crude extending yesterday’s recovery after Saudis announced plans to support prices. China stabilized its currency by fixing the yuan at stronger level than exp (7.0039 vs 7.0156 according to BN). Focus on today’s US $19bln 30Y auction after weak 10Y yest ( 1.67 vs 1.653 WI). In Canada, GOCs outperforming tsys 1-2bps out the curve, 10Y 1.20%. Yesterday’s intraday low on 10s 1.13% prior to the Saudi announcement, recovery in stocks and a rare onslaught of afternoon corp supply – $2bln across 4 issues including a Sun Life 10NC5 @ 117 and two tranche Enbridge Gas 10s &30s.
News headlines
Stocks Rise With Yuan, Oil; Gold Dips Below $1,500: Markets Wrap (Bloomberg) U.S. equity futures edged higher while European and Asian stocks advanced with the yuan after China’s stronger-than-expected daily fixing of its currency eased fears about a worsening trade conflict. Gold slipped from a six-year high.
TSX futures point to flat opening (Reuters) Futures for Canada’s main stock index were little changed on Thursday, a day after ending a week-long losing streak as calm returned to global markets.
China surprises with best export growth since March, but imports remain weak (Reuters) China’s exports unexpectedly returned to growth in July on improved global demand despite escalating U.S. trade pressure, but the rebound may be short-lived as Washington prepares to slap even more tariffs on Chinese goods.
China continued Iran oil imports in July in teeth of U.S. sanctions: analysts (Reuters) China imported Iranian crude oil in July for the second month since a U.S. sanctions waiver ended, according to research from three data firms, with one estimate showing some oil entered tanks holding the country’s strategic reserves.
Japan greenlights first South Korea export since July curbs, but with a warning (Reuters) Japan has approved shipment of a high-tech material to South Korea for the first time since imposing export curbs last month, but doubled down on political pressure and warned it could broaden restrictions on deliveries to its Asian neighbor.
Rate cuts, China data caps dollar gains (Reuters) The dollar steadied on Thursday as risk sentiment rose after resilient Chinese trade data and as Beijing’s efforts to slow a slide in the value of the renminbi encouraged investors to buy riskier currencies.
Oil rebounds from seven-month low as Saudis seek to stem slide (BNN) Oil rebounded from the lowest level since January after Saudi Arabia contacted other producers to discuss options to stem a rout that’s been driven by the worsening U.S.-China trade war.
Market Overview: US 10yr note futures are down -0.204% at 129-29, S&P 500 futures are up 0.25% at 2887.75, Crude oil futures are up 1.82% at $52.02, Gold futures are down -0.66% at $1509.5, DXY is up 0.11% at 97.649, CAD/USD is down -0.03% at 0.7519.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.344% | 2 Year | 1.597% |
| 5 Year | 1.204% | 5 Year | 1.531% |
| 10 Year | 1.214% | 10 Year | 1.717% |
| 30 Year | 1.462% | 30 Year | 2.234% |
US Economic Data
| 08:30 AM | Initial Jobless Claims, Aug 3 Survey: 215k Prior: 215k |
| Continuing Claims, Jul 27 Survey: 1690k Prior: 1699k | |
| 09:45 AM | Bloomberg Consumer Comfort, Aug 4 Survey: — Prior: 64.7 |
| 10:00 AM | Wholesale Trade Sales MoM, Jun Survey: 0.20% Prior: 0.10% |
| Wholesale Inventories MoM, Jun F Survey: 0.20% Prior: 0.20% |
Canadian Economic Data
| 08:30 AM | New Housing Price Index MoM, Jun Survey: 0.00% Prior: -0.10% |
| New Housing Price Index YoY, Jun Survey: -0.10% Prior: 0.00% |
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