Market Update
US tsys mixed, curve continuing post Powell steepening with short end yields another ~1bp lower, 10Y unch @ 2.06%, moderate volume in TY futures (300k). June CPI (0.1%) and Powell testimony key events, as well as $16bln 30Y auction. Core Euro bonds sharply lower led by UK gilts (10Y +6bps) after Carney comments on no-deal Brexit, also stronger French & Italian IP data. GOCs unch before New House Price data, 10Y 1.58%.
News headlines
Stocks Climb on Rate-Cut Bets; Dollar Declines: Markets Wrap (Bloomberg) U.S. equity futures climbed alongside stocks in Europe and Asia as investors cheered fresh signs from central bankers that rates are headed lower. Treasuries were steady, while the dollar declined.
TSX futures flat, higher oil prices limit losses (Reuters) Canada’s main stock index futures were flat on Thursday, with a rise in oil prices to a six-week high limiting losses.
Oil rises to seven-week high on gulf storm, U.S. stockpile draw (BNN) Oil extended gains after closing at a seven-week high as a third of the Gulf of Mexico’s crude output was halted by a storm and U.S. crude inventories declined more than expected.
Besting U.S. growth is Canada’s ticket to defying easing spree (BNN) The Bank of Canada’s firmly entrenched holding pattern on rates will be put to the test by the country’s ability to withstand a deceleration in the world’s largest economy and its biggest trading partner.
Risks aside, Trump’s team sees China trade stance as strength in 2020 (Reuters) As trade talks resume between China and the United States, President Donald Trump’s advisers are confident he can portray his stance against Beijing as a strength in the 2020 election, despite making concessions and having no deal in sight.
Bitcoin extends losses after Fed chief urges halt to Facebook’s crypto project (Reuters) Bitcoin dipped almost 8% on Thursday, extending losses the day after U.S. Federal Reserve Chairman Jerome Powell called for a halt to Facebook’s Libra cryptocurrency project until concerns ranging from privacy to money-laundering were addressed.
Powell Sounds Dovish Enough to Open Door for a Half-Point Cut (Bloomberg) Nothing seems likely to stop Jerome Powell from cutting interest rates later this month. Not the regional Federal Reserve presidents who want to wait, not the strongest labor market in decades, and certainly not the political shadows that hang over such a move.
Market Overview: US 10yr note futures are down -0.012% at 127-14, S&P 500 futures are up 0.22% at 3004, Crude oil futures are up 0.45% at $60.7, Gold futures are up 0.67% at $1422, DXY is down -0.23% at 96.876, CAD/USD is down -0.17% at 0.7657.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.567% | 2 Year | 1.816% |
| 5 Year | 1.522% | 5 Year | 1.823% |
| 10 Year | 1.582% | 10 Year | 2.063% |
| 30 Year | 1.756% | 30 Year | 2.582% |
US Economic Data
| 08:30 AM | CPI MoM, Jun Survey: 0.00% Actual: 0.1% Prior: 0.10% |
| CPI Ex Food and Energy MoM, Jun Survey: 0.20% Actual: 0.3% Prior: 0.10% | |
| CPI YoY, Jun Survey: 1.60% Actual: 1.6% Prior: 1.80% | |
| CPI Ex Food and Energy YoY, Jun Survey: 2.00% Actual: 2.1% Prior: 2.00% | |
| CPI Core Index SA, Jun Survey: 262.564 Actual:262.803 Prior: 262.032 | |
| Initial Jobless Claims, Jul 6 Survey: 221k Actual: 209k Prior: 221k | |
| CPI Index NSA, Jun Survey: 256.092 Actual: 256.143 Prior: 256.092 | |
| Continuing Claims, Jun 29 Survey: 1683k Actual:1723k Prior: 1686k | |
| Real Avg Hourly Earning YoY, Jun Survey: — Actual: 1.5% Prior: 1.30% | |
| Real Avg Weekly Earnings YoY, Jun Survey: — Actual 1.2% Prior: 1.00% | |
| 09:45 AM | Bloomberg Consumer Comfort, Jul 7 Survey: — Prior: 62.6 |
| 02:00 PM | Monthly Budget Statement, Jun Survey: -$7.9b Prior: -$74.9b |
Canadian Economic Data
| 08:30 AM | New Housing Price Index MoM, May Survey: 0.10% Actual: -0.1 Prior: 0.00% |
| New Housing Price Index YoY, May Survey: 0.20% Actual:0.0% Prior: 0.10% |
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