Market Update
US tsys stronger, yields 5-6bps lower with the 10Y 1.69% (-5.5bps). European equities erased earlier gains, US equity futures -0.5% on avg volume in TY futures (350k). Escalating tensions and an upset defeat for President Macri in Argentina’s primary election. Quiet on the US data front today, July CPI tomorrow and Retail Sales on Thursday the highlights for the week. GOCs lagging the rise in tsys by ~1bp, the BOC will auction $1.4bln Dec 2051s on Wednesday with the 51/48 roll fairly flat after having reached 1bp thru in early July, prior to the huge FTQ rally which has been lead by 10s and has seen 10s30s resteepen by 10bps.
News headlines
U.S. Stock Futures Decline as Hong Kong Sours Mood: Markets Wrap (Bloomberg) U.S. equity futures reversed an advance on Monday alongside European stocks as mounting unrest in Hong Kong weighed on investor sentiment. Treasuries and the yen extended gains while gold and the dollar both turned higher.
TSX futures drop as trade war, recession worries weigh (Reuters) Futures for Canada’s main stock index pointed to a lower opening on Monday, as oil prices dropped amid worries of an economic slowdown and a year-long Sino-U.S. trade tariff tussle.
Oil Declines as Trade Tensions Continue to Stoke Demand Fears (Bloomberg) Oil dropped as U.S. President Donald Trump said planned trade talks with China next month could be called off, stoking concerns the deepening dispute will damage global growth.
U.S. adviser Bolton courts Brexit Britain with a trade deal talk (Reuters) U.S. President Donald Trump wants to see a successful British exit from the European Union that Washington will support with a U.S.-UK free trade agreement, national security adviser John Bolton told British officials on Monday.
Fed remains a target as economy falls short of Trump’s ambitious goals (Reuters) It has become a jarring and frequent contradiction. President Donald Trump blames the Federal Reserve for putting the U.S. economy at risk while data shows an economy in “reasonably good” shape, as the head of the central bank recently said.
Global economic outlook darkens amid escalating trade dispute, Ifo says (Reuters) The economic outlook has deteriorated worldwide as the trade dispute between the United States and China escalates, a survey showed on Monday.
Goldman Sachs economists say fears rise that U.S.-China trade war leading to recession (Reuters) Goldman Sachs Group Inc (GS.N) said on Sunday that fears of the U.S.-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 U.S. presidential election.
Market Overview: US 10yr note futures are up 0.241% at 130-00, S&P 500 futures are down -0.55% at 2903.75, Crude oil futures are down -0.75% at $54.09, Gold futures are up 0.48% at $1515.8, DXY is up 0.05% at 97.537, CAD/USD is up 0.08% at 0.7558.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.348% | 2 Year | 1.598% |
| 5 Year | 1.223% | 5 Year | 1.524% |
| 10 Year | 1.226% | 10 Year | 1.69% |
| 30 Year | 1.479% | 30 Year | 2.204% |
US Economic Data
| 02:00 PM | Monthly Budget Statement, Jul Survey: -$120.0b Prior: -$76.9b |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Aug 9 Survey: — Prior: 58.6 |
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