Market Update
Tsys lower, prices gapping lower overnite on ‘risk-on’ after Hurricane Irma weakened and N. Korea did not fire a missile on Saturday as expected, the US 10Y 5bps higher @2.10% with the tsy curve ~1bp steeper. Global equities higher, Euro stoxx +1.0%, S&P futures +11pts. Core Euro bonds also weaker lead by UK gilts yields ~5bps higher, bunds outperforming bund/gilt spd 2bps wider – mkt looking ahead to heavy data week in the UK with CPI/PPI Wed followed by BOE on Thursday. Also Austria is looking to issue 5Y and 100Y bonds in the near future. In Canada, GOCs are lower, lagging the pullback in tsys slightly (1-2bps), after spreads blew out ~20-30bps last week, GOC 10Y 2.02% highest since July 31st. Provis opening unch after spds widened 3bps last week despite higher all in yields. Quebec fiscal update released Friday showed a surplus for the three months ended June 30th 2017 of $98mln vs a deficit of $529mln last yr. For 2017-18 Quebec forecasts a balanced budget. The province also announced plans to issue ultra long bonds.
News headlines
Irma Weakens as It Heads Past Tampa, Cutting Damage Forecast (Bloomberg) Hurricane Irma weakened as it moved past Tampa, leaving in its wake at least 4.7 million without power, millions temporarily displaced and a forecast for as much as 15 inches of rain in what may go down as one of the worst storms in Florida’s history.
Hurricanes Irma and Harvey to hit oil demand – Goldman Sachs (CNBC) Oil demand is likely to fall by about 900,000 barrels per day (bpd) in September due to the combined impact of hurricanes Harvey and Irma, Goldman Sachs said on Monday.
Trump Debt Limit Deal Undermines Trust Among GOP on Tax Overhaul (Bloomberg) The White House said President Donald Trump cut a short-term debt ceiling and government spending deal with Democrats to clear the deck for a major tax bill. But the agreement could be complicating tax efforts by eroding trust within his own party. Not only has the deal sowed doubt among the GOP about its unpredictable president, but it’s also driving a wedge between Republicans and their leaders in Congress, just as the party is desperate to deliver on one of its top priorities.
U.N. Security Council to vote Monday on weakened North Korea sanctions: diplomats (Reuters) The U.N. Security Council is set to vote on Monday on a watered-down U.S.-drafted resolution to impose new sanctions on North Korea over its latest nuclear test, diplomats said, but it was unclear whether China and Russia would support it.
US Economic Data
There is no economic data scheduled for today.
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Sep. (prior 58.9) |
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
Institutional Bond and Equity Desk
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