Market Update Tsys slightly lower, 10Y 2.87%, earlier Turkish lira fell to new lows vs the USD. Strong volume in TY futures, ~880k or 4x recent avg. Core EGBS underperforming, Sep gilts fell to session lows after reports Turkey was set to release UK Pastor. US equity futures well off the lows, S&P unch after being down 16. US data calendar quiet, picks up Wednesday with Retail Sales. GOCs lower, reversing earlier gains as equity mkts recover. Provis closed wider Friday on risk off, spds opening unch.
News headlines
Canada Overcomes Trump’s Metal Tariffs With Record Exports (Bloomberg) Canada’s merchandise trade deficit narrowed more than forecast as oil producers and aircraft makers led exports to a record high. Even after the U.S. imposed tariffs on steel and aluminum, Canada’s trade gap narrowed to C$626 million ($481 million) in June, down from C$2.7 billion a month earlier, Statistics Canada said Friday in Ottawa. Economists surveyed by Bloomberg predicted a deficit of C$2.3 billion. Exports rose 4.1 percent to C$50.7 billion, with energy shipments up 7.1 percent to the highest since 2014 and aircraft sales jumping by almost 45 percent. The return of several Canadian refineries to production after shutdowns also played a role in the 0.2 percent decline in imports as demand for foreign gasoline tumbled.
Robust Growth Pushes Canada’s Jobless Rate to Lowest Since 1970s (Bloomberg) Canada’s jobless rate returned to four-decade lows in July on stronger-than-expected employment gains, adding to evidence the nation’s economy continues to power ahead. The unemployment rate declined to 5.8 percent from 6 percent in June, matching the lowest level since the 1970s, Statistics Canada reported Friday from Ottawa. The economy added 54,100 jobs, marking a second straight month of exceptionally strong labor market gains.
Kushner’s Ties to Russia-Linked Group Began With Kissinger Lunch (Bloomberg) In March 2016, as the U.S. foreign policy establishment shunned presidential candidate Donald Trump, his son-in-law Jared Kushner was invited to lunch for a think tank urging detente with Russia and struggling for influence in Washington. The meeting at Manhattan’s Time Warner Center, which hasn’t been reported before, would prove significant for the Center for the National Interest and Kushner, who was still a little-known figure in the Trump campaign.
Stocks, EM Currencies Drop as Turkey Fever Spreads: Markets Wrap (Bloomberg) There were broad declines across equities on Monday and a sell-off in developing-nation currencies as the ongoing economic crisis in Turkey bled into global markets. The dollar and yen advanced. Futures on the Dow, S&P 500 and Nasdaq all pointed to a weaker open, while banks were among the biggest losers as the Stoxx Europe 600 Index fell. There’s concern the sector is heavily exposed to borrowers in Turkey, where the lira tumbled again alongside the country’s equities after President Recep Tayyip Erdogan maintained his defiance toward the U.S. and financial-market orthodoxy in speeches on Sunday. Central bank moves to boost liquidity provided little relief. The pain spread across emerging-market assets and the South African rand hit the lowest since June 2016.
Futures dip as Turkish currency crisis roils global markets (Reuters) Canada’s main stock index futures fell on Monday as ripple effects of the Turkish currency crisis continued to affect global markets, with investors seeking safety in government bonds and the dollar. September futures on the S&P/TSX index SXFc1 were down 0.13 percent at 7:15 a.m. ET. Canada’s main stock index fell on Friday. Dow Jones Industrial Average e-mini futures 1YMc1 were down 0.28 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were down 0.26 percent and Nasdaq 100 e-mini futures NQc1 were down 0.26 percent.
Trump threatens auto tariffs against Canada if trade talks fail (BNN) U.S. President Donald Trump said negotiations with Mexico on a new NAFTA are “coming along nicely,” while telling Canada it will have to wait to re-enter the talks to modernize the three-nation trade pact — hinting at his preference for bilateral negotiations. “Deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of or there will be no deal,” Trump tweeted late Friday, adding that incoming Mexican president Andres Manuel Lopez Obrador “has been an absolute gentleman.” Trump had harsher words for Canada, the other partner in the North American Free Trade Agreement. “Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!” he said.
Elon Musk’s tweet draws Tesla investor lawsuit over share price swing (BNN) Tesla Inc. () and Elon Musk were sued by an investor over wild share price swings following the chief executive officer’s Aug. 7 tweet saying he was considering taking the company private. The complaint alleges violations of U.S. securities law and was filed Friday as a class action in federal court in San Francisco. Musk set off a firestorm with the 53-character post on Twitter: “Am considering taking Tesla private at $420. Funding Secured.” The stock initially shot up 11 per cent to almost US$380. Then it fell back, losing about 7 per cent over two days, as doubts mounted about the feasibility of the going-private idea — and about the chief executive officer’s declaration that funding was already in place. He hasn’t supplied evidence that it was; nor has anyone else.
Overnight markets
Overview: US 10yr note futures are down -0.065% at 120-10, S&P 500 futures are down -0.09% at 2834.25, Crude oil futures are down -0.46% at $67.32, Gold futures are down -1.06% at $1206.1, DXY is up 0.06% at 96.418, CAD/USD is up 0.05% at 0.7605.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.1% | 2 Year | 2.598% |
| 5 Year | 2.209% | 5 Year | 2.735% |
| 10 Year | 2.29% | 10 Year | 2.87% |
| 30 Year | 2.31% | 30 Year | 3.035% |
US Economic Data
| 08/13 | Mortgage Delinquencies, 2Q (4.63% prior) |
| MBA Mortgage Foreclosures, 2Q (1.16%) |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Aug 10th (55.4 prior) |
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, Hugues Savard
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