Market update

US tsys opening lower, curve steeper with the US 10Y 2.164 (+3.7bps)on ‘risk on’ after China stocks rallied 3.0% despite poor export figures.  European equities are higher, USD lower , gold higher and crude lower. Also weighing on tsys – a wave of govt/corp supply: the US auctions $58bln in 3,10& 30Y bonds this week while corp issuance expected to pick up after a slow August. CP (Baa1/BBB+) set to issue ~$1bln in 20 & 30Y bonds to fund capital investments as well as a $850mln repurchase pgrm. S&P had noted that this would raise its debt/ebitda to ~2.5x – above which would necessitate a downgrade. In Canada, GOCs are lower & steeper with provis unch – expectations of supply weighing despite the positive tone in credit/equities, thou GOCs $1.00 lower in longs not supportive.

News headlines

Overnight markets

  •  Overview: IG24 5Y 80.4/80.9 (-2.35), US 10yr note futures are down -0.23% at 127-14+, S&P 500 futures are up +1.70% at 1954.50, Crude oil futures are down -0.85% at 45.66, Gold futures are up +0.13% at $1122.9, DXY is down -0.12% at 96.111.
  • US BANK CDS (5yr): BAC 76/80 (-1), GS 94/98 (-1), MS 85/89 (-1), C 85/89 (-1), JPM 77/81 (-1), WFC 56/60 (-1)

 US Economic Data

  • NFIB Small Business Optimism Index for August came in at 95.9 compared to the consensus of 96.0 and prior month (95.4).
  • Labor market conditions for August will be release at 10:00 and is forecasted at 1.5 after a 1.1 level in July.
  • Consumer credit is forecast at $18.0B  in July versus June $20.74B.

Canadian Economic Data

  •  Bloomberg Nanos Canadian Confidence Index will be released today at 10:00am.


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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230