14/09/2016

cti2015header-morning comments web

Market Update

  • US Treasuries open NY higher and flatter, 10-year note 1.709%. Rates trading firmer, near top end of range — recovering fraction of Tue’s sell-off, decent volume. Early Asian market flow included fast$ rate and spd paying in 5s, Asian commercial bank sales in 10s, Asian insurance portfolio and credit desk buying in 30s. Buying in 5s, 10s and 30s from domestic and Asian real$ on the follow though latter turned sellers in same not long after. More paying in 5Y Swaps by Asian commercial banks while credit desks sold 5s and bought 30s. Japanese banks, real$ and insurance portfolio returned to buy 7s, 10s and 30s while N.Asian bank bought 10Y notes. Long end JGBS hurt as curve steepened on more talk BOJ will trim its bond purchases and MOF will increase 40Y issuance.

News headlines                                                                                       

  • Stocks Halt Selloff in Europe as Commodities Gains Lift Miners (Bloomberg) A rout in financial markets that’s wiped some $2 trillion off the value of global equities over the past week showed signs of easing, with European stocks climbing for the first time in five days as oil and metals prices gained.
  • Bond sell-off keeps investors on edge (Reuters) Rising bond yields, triggered in part by deepening worries over the difficulty of the world’s major central banks to stimulate growth, kept investors in broadly risk-off mode on Wednesday. The possible spillover effects of the rises into stock and commodity markets has hit financial assets as funds, who have been betting on a long period of low volatility and suppressed yields, are being forced to reassess positions.
  • Global oil demand growth shrinks, appeal of cheaper fuel prices loses lustre (Financial Post) Oil prices tumbled Tuesday on a report from the International Energy Agency that global demand growth is shrinking, raising concerns over whether the economic boost from low fuel prices has run its course. In its latest monthly oil report, the Paris-based agency signaled that the economy may have wrung dry any savings from prolonged low prices, saying “stimulus from cheaper fuel is fading” as the global supply glut persists.
  • EU restates positions on Brexit talks, market access (Reuters) EU chief executive Jean-Claude Juncker warned London again on Wednesday that it could not have access to Europe’s single market if it bars some EU citizens from working in Britain after Brexit.
  • Wage growth slows after Brexit vote (The Guardian) A slide in wages growth in the month after the Brexit vote appeared to give the first warning sign that the uncertainty surrounding the outcome of the referendum could harm the UK labour market. The Office for National Statistics said wages growth slipped to 2.1% in the three months to July, from a revised 2.4% a month ago. When bonuses are added to the wage total, earnings rose by 2.3% during the quarter, down from 2.5%.
  • Trudeau Said to Plan Pipeline Approval, Favor Kinder Morgan (Bloomberg) Canadian Prime Minister Justin Trudeau plans to approve at least one new oil pipeline project in his first term, with Kinder Morgan Inc.’s Trans Mountain expansion to the Pacific Coast the most likely candidate, people familiar with his plans said. The prime minister is seeking to strengthen environmental standards and build confidence in new regulatory rules while also stoking growth in Canada’s sluggish economy by backing a pipeline.
  • Bayer says clinches $66 billion Monsanto takeover (Reuters) Bayer said on Wednesday it won over Monsanto’s management with a $128 per share offer in cash, worth about $66 billion including debt, to take over the global seed market leader. The companies have agreed on an antitrust break fee of $2 billion and the deal is expected to be closed by the end of 2017, the German group said in a statement.

Overnight markets

  • Overview: US 10yr note futures are up 0.1563% at 130-6, S&P 500 futures are up 0.19% at 2126.25, Crude oil futures are down -0.67% at $44.6, Gold futures are up 0.14% at $1325.6, DXY is down -0.11% at 95.529.

US Economic Data

  • 8:30 AM: Import Price Index, m/m, August, -0.2%, est. -0.1% (prior 0.1%)
    •     Import Price Index, y/y, August, -2.2%, est. -2.2% (prior -3.7%)

Canadian Economic Data

  • There is no major economic news for today

 

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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