Market update

US tsys opening lower after in line Retail Sales & overnite ‘risk on’ session, US 10Y 2.18 (+3.0bps). PBOC tried to calm nerves over Yuan devaluation, saying China has ample reserves, strong economy .  US auctions $16bln in 30Y bonds at 1:00EST after a poorly received 10Y yest. Core Euro bond yields sharply higher led by ~6bps in UK gilts. In Canada, GOCs are lower led by the belly of the curve. Provis opening tighter after closing ~2-2.5bps wider yest.

News headlines 

  • China puts September Fed rate lift-off in doubt (FT) It was nearly a century ago during the battle of the Marne that the French marshal Ferdinand Foch messaged his superiors: “My centre is giving way, my right is in retreat. Situation excellent. I shall attack.”
  • Who’s Crazy Now? Yuan Bears Vindicated by Tumble See More Pain (Bloomberg) Sue Trinh had to defend her sanity. Albert Edwards almost got kicked out of meetings. Kevin Lai was ignored by clients for an entire year.Once ridiculed for their bearish forecasts on China’s currency, the analysts who predicted this week’s devaluation don’t look so crazy now.
  • Greek Economy Grows Unexpectedly in Second Quarter (WSJ) Greece’s economy grew unexpectedly in the second quarter of the year on the back of a strong start to the tourism season and resilient consumption, data from the Greek statistics agency showed Thursday.

Overnight markets

  • Overview: IG24 5Y 75.5/76 (-0.2), US 10yr note futures are down -0.31% at 127-18+, S&P 500 futures are down -0.10% at 2082.25, Crude oil futures are down -1.09% at 42.83, Gold futures are down -0.81% at $1114.5, DXY is up +0.50% at 96.740.

 US Economic Data

  •  Retail sales increased 0.6% MoM in July, equal to expectations, after decreasing -0.3% the previous month.
  • Retail sales excluding automobiles increased 0.4% in July, compared to consensus of a 0.4% gain, and a revised 0.4% increase in June.
  • Initial jobless claims came in at 274K  for the week ending August 8, higher than expected (270K) and prior week (269K).
  • Continuing claims increased to 2273K from 2258K and higher than expected (2245K).
  • Import price index came in at -0.9% MoM (-10.4% YoY) in July versus June -0.1% MoM (-9.9% YoY).
  • Business inventories are forecast to increase 0.3% MoM in June, equal to previous month.

Canadian Economic Data

  • New housing price index increased 0.3% MoM (+1.3% YoY) in June compared to May 0.2% MoM (1.2% YoY).



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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230