Market Update
Tsy futures trading modestly weaker, off lows to top end overnight range last few minutes, decent volume (TYZ>395k). Yld curves unwind portion of wk’s bear steepening (3M10Y +35bp from last weeks lows).Treasuries have only seen small moves ahead of tomorrow’s key ECB meeting which has the potential to move fixed income markets globally as the ECB is expected to unveil its latest easing round. There has been little in the way of pure US news but Trump has been tweeting early this morning that the Fed should cut rates to zero or even lower. There was some movement overnight after the Global Times editor said that China would introduce measures to ease the negative impact of the trade way.
US Data release today Core PPI, it is expected to rebound to +0.2% after -0.1% in July. Headline PPI expected at +0.1% vs +0.2% in July on weak energy prices. Trade tensions and tariffs could drive up prices on select goods Food, trade services also expected to bolster PPI.
News headlines
U.S. Futures Drift as Stocks in Europe, Asia Climb: Markets Wrap (Bloomberg) U.S. stock-index futures drifted, failing to pick up momentum from a broad advance in equities in Europe and Asia after signs emerged that China will move again to lessen the trade war’s repercussions. Oil futures rose with the dollar.
Futures rise on hopes of easing U.S.-China trade tensions (Reuters) Futures for Canada’s main stock index edged higher on Wednesday, as investors were encouraged by hopes of a resolution to the Sino-U.S. trade standoff.
Trump calls on Fed to cut interest rates to zero ‘or less’ (BNN) The U.S. Federal Reserve should get interest rates down to “zero, or less,” and then start to refinance its debt, President Donald Trump said in early Wednesday tweet.
Oil Rises as Falling U.S. Stockpiles Offset Bolton’s Ouster (Bloomberg) Oil rose as industry data showed a decline in American stockpiles, countering speculation that the ouster of U.S. National Security Adviser John Bolton may lead to a less hawkish approach on Iran and Venezuela.
China starts tariff exemptions, but keeps pressure on U.S. farms (BNN) China announced a range of U.S. goods to be exempted from 25 per cent extra tariffs put in place last year, as the government seeks to ease the impact from the trade war without lifting charges on major agricultural items like soybeans and pork.
In a fracturing world, central banks still stuck together (Reuters) The last time major central banks shifted gears together, it was a cooperative move to keep the financial crisis of a decade ago from becoming a full-bore, worldwide depression.
Seoul to file WTO complaint over Japan’s ‘discriminatory’ export curbs (Reuters) South Korea plans to file a complaint over Japan’s tighter export controls at the World Trade Organization on Wednesday, accusing Tokyo of being “politically motivated” and “discriminatory” in an escalating row rooted in wartime history.
Oil curtailments hurting investment in Canadian energy: Suncor CEO (BNN) Suncor Energy Inc. President and Chief Executive Officer Mark Little said an investment chill remains in the oil and gas market, echoing comments made by his predecessor that there is a lack of investor confidence in the country’s energy sector.
Market Overview: US 10yr note futures are down -0.156% at 129-31, S&P 500 futures are up 0.16% at 2983.25, Crude oil futures are up 0.82% at $57.87, Gold futures are up 0.01% at $1499.4, DXY is up 0.33% at 98.654, CAD/USD is down -0.03% at 0.7606.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.59% | 2 Year | 1.666% |
| 5 Year | 1.432% | 5 Year | 1.58% |
| 10 Year | 1.415% | 10 Year | 1.725% |
| 30 Year | 1.604% | 30 Year | 2.203% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, Sep 6 Survey: — Actual: 2.00% Prior: -3.10% |
| 08:30 AM | PPI Final Demand MoM, Aug Survey: 0.00% Prior: 0.20% |
| PPI Ex Food and Energy MoM, Aug Survey: 0.20% Prior: -0.10% | |
| PPI Final Demand YoY, Aug Survey: 1.70% Prior: 1.70% | |
| PPI Ex Food and Energy YoY, Aug Survey: 2.20% Prior: 2.10% | |
| 10:00 AM | Wholesale Inventories MoM, Jul F Survey: 0.20% Prior: 0.20% |
| Wholesale Trade Sales MoM, Jul Survey: — Prior: -0.30% |
Canadian Economic Data
| 08:30 AM | Capacity Utilization Rate, 2Q Survey: 82.00% Prior: 80.90% |
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