Market Update
US tsys trading lower, 10Y 2.055% (+1bp), on heavier volume in TY futures (450k), despite weaker equities (S&P -10). Fed chair Powell to speak on ‘stress tests’ before key testimony tomorrow. Core EGBs mixed, gilts outperforming, focus on the launch of the 2041 linker with strong order books (Stg20bln vs Stg2.5 bln allocated). Italy 6bps tighter vs Germany – Italy 50Y BTP auction also way oversubscribed (E17bln vs E3bln offering). In Canada, GOCs slightly higher, 1bp tighter vs tsys. The GOC curve continuing to flatten before the BOC tomorrow – 2s5s reaching below -11bps yesterday aft. The BOC expected to stick with its neutral bias, with the outloook for near term growth having greatly improved since the April MPR – the latest Bloomberg consensus is for 2.2% in Q2 vs 1.3% BOC forecast, thou trade worries should temper some of the Bank’s optimism.
News headlines
U.S. Futures, Europe Stocks Slide; Treasuries Dip: Markets Wrap (Bloomberg) U.S. stock futures and European shares retreated alongside Asian equities as markets extended a downbeat start to the week. The dollar strengthened for a third day.
TSX futures lower as gold prices ease (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Tuesday, weighed down by falling gold prices.
Oil Steadies Before Fed Testimony While Mideast Risks Linger (Bloomberg) Oil steadied near $58 a barrel in New York as investors awaited guidance from the Federal Reserve on interest rates and as tensions in the Persian Gulf maintained the risk of supply disruption.
U.S., China to relaunch talks with little changed since deal fell apart (Reuters) The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed.
Deutsche Bank shares slide again on skepticism about turnaround (Reuters) Deutsche Bank DKBGn.DE shares extended losses on Tuesday on investor doubts that the new chief executive can revive the lender by shrinking the investment bank and returning to its roots as banker to corporate Germany.
Canada pushes to get China meat exports resumed this week (BNN) Canadian authorities are hoping to convince China to lift a ban on meat shipments as early as this week, according to livestock groups.
Bitcoin near two-week highs, fueled by hopes for Facebook’s Libra (Reuters) Bitcoin held on Tuesday near its highest for two weeks after surging as much as 9% overnight, a move analysts said was probably driven by hopes that cryptocurrencies are gaining wider acceptance after Facebook disclosed plans for a digital coin.
Market Overview: US 10yr note futures are down -0.233% at 127-07, S&P 500 futures are down -0.34% at 2968.25, Crude oil futures are up 0.52% at $57.96, Gold futures are down -0.44% at $1393.9, DXY is up 0.2% at 97.577, CAD/USD is up 0.22% at 0.7619.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.675% | 2 Year | 1.907% |
| 5 Year | 1.576% | 5 Year | 1.877% |
| 10 Year | 1.586% | 10 Year | 2.065% |
| 30 Year | 1.735% | 30 Year | 2.54% |
US Economic Data
| 06:00 AM | NFIB Small Business Optimism, Jun Survey: 103.1 Actual: 103.3 Prior: 105.0 |
| 10:00 AM | JOLTS Job Openings, May Survey: 7473 Prior: 7449 |
Canadian Economic Data
| 08:15 AM | Housing Starts, Jun Survey: 208.6k Actual: 245.7k Prior: 202.3k |
| 08:30 AM | Building Permits MoM, May Survey: -10.00% Prior: 14.70% |
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