Market Update Tsys trading slightly lower , yields 0.8-1.5bps higher across the curve, the 10Y 2.84% (+1.3bps), narrow range in TY futures on very light volume (133k, less than 50% of avg). Retail Sales/Empire Man at 8:30, Fed Powell semi annual testimony Tuesday at 10:00. Equity futures mixed, S&P -0.50, Nasdaq +6. BoA Q2 eps beat estimates, $0.63 vs $0.57, the highest qtry eps since Q2 2008 (BAC +0.6% pre-mkt). Crude under pressure, 69.65 -2.0%, Saudis responding to pressure by Trump to increase supply. GOCs lower , in line with tsys, yields at pre BOC levels, hike was well telegraphed after strong GDP, BOC survey.
News headlines
Trump and Putin Begin Helsinki Summit With Handshake at Palace (Bloomberg) President Donald Trump began his meeting with Vladimir Putin in Helsinki on Monday, testing his campaign pledge to revive ties with Russia amid pressure to confront the Kremlin leader over election meddling and growing concern that the U.S. is abandoning the current international order. The highly anticipated event is to start with 90 minutes in which the former property developer and the former KGB agent meet one-on-one, with only their respective translators in attendance. For Putin, the meeting is a win even before it began, as it helps restore an image of parity with the U.S. that Russia lost after the collapse of the Soviet Union.
China’s Cooling Economy Spells Trouble Ahead for Global Growth (Bloomberg) Confirmation that China’s economy is slowing amid an escalating trade war is a worrying omen for global growth. Data released since Friday has affirmed what’s been expected for some time: That an ongoing campaign to curtail credit is putting the brakes on the world’s second-largest economy. Given that China generates as much as a third of global growth, that’s adding to signs that the best world expansion in years is plateauing.
BOE Gets Vital Economic Healthcheck Before August Meeting (Bloomberg) Bank of England policy makers are getting a crucial glimpse of the health of the U.K. economy before their crunch August meeting. A deluge of numbers on wages, inflation, retail sales and public borrowing are coming over the next five days. While a similar run of reports prompted the bank to back away from an interest-rate increase in May, this time appears different, with recent indicators looking more positive.
Stocks Struggle Amid Earnings; Dollar Declines: Markets Wrap (Bloomberg) U.S. equity futures were steady and European stocks slipped as traders looked toward company results after mixed economic data out of China spurred declines for Asian shares. The dollar weakened against most peers. Futures on the S&P 500 edged lower while those for Nasdaq and the Dow pointed to a flat open. Most of the industry groups fell on the Stoxx Europe 600 Index, overwhelming gains by banks after Deutsche Bank AG surprised with an early forecast of strong earnings. Bank of America Corp. and BlackRock Inc. also reported better-than-expected earnings. Shares in Asia fell earlier, with volumes down in most markets and Japan shut for a holiday.
Airbus signs preliminary deal for 80 A320neo jets with leasing firm (Reuters) European planemaker Airbus (AIR.PA) said on Monday it had signed a memorandum of understanding to sell 80 of its A320neo passenger jets to an unidentified global aircraft leasing company. The deal, announced at the Farnborough Airshow, would be worth around $8.8 billion at list prices.
TSX futures lower as oil prices slip (Reuters) Futures for Canada’s main stock index were lower on Monday as oil prices fell on the back of easing concerns about supply disruptions and potential production increases by countries such as Russia. September futures on the S&P/TSX index were down 0.1 percent at 7:15 a.m. ET. Foreign and domestic securities data is due at 8:30 a.m. ET The Toronto Stock Exchange’s S&P/TSX fell 6.30 points, or 0.04 percent on Friday, to 16,561.12 as materials and financials weighed.
U.S. lifts ban on China’s ZTE after it pays US$1.4B penalty (BNN) The U.S. Commerce Department has lifted the ban on American firms selling products to China’s ZTE Corp., removing the final hurdle for the company to start rebuilding its business. The ban was removed after ZTE paid the final tranche of a US$1.4 billion penalty by placing US$400 million in escrow at a U.S. bank, the department said in an emailed statement on Friday. That sum comes in addition to US$892 million in penalties the telecommunications-equipment maker has paid to the U.S. government after pleading guilty for violating sanctions, it said.
Canada’s big banks raise prime rate to 3.7% after Bank of Canada hike (BNN) Canadian banks say they will raise their prime lending rate after the Bank of Canada increased its overnight lending rate to financial institutions. Royal Bank (), TD Canada Trust (), BMO (), CIBC (), National Bank (), and Scotiabank () all say they will increase their prime rate by a quarter of a percentage point to 3.70 per cent, effective Thursday. The rates had previously been set at 3.45 per cent. The increase will raise the cost of borrowing for customers with loans linked to the prime rate such as variable rate mortgages and lines of credit.
Overnight markets
Overview: US 10yr note futures are down -0.052% at 120-10, S&P 500 futures are down -0.04% at 2802, Crude oil futures are down -1.52% at $69.93, Gold futures are up 0.2% at $1243.7, DXY is down -0.22% at 94.469, CAD/USD is down -0.12% at 0.7609.
Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
2 Year | 1.93% | 2 Year | 2.586% |
5 Year | 2.059% | 5 Year | 2.737% |
10 Year | 2.143% | 10 Year | 2.836% |
30 Year | 2.195% | 30 Year | 2.942% |
US Economic Data
8:30 AM | Empire Manufacturing, Jul est 21.0 (25.0 prior) |
Retail Sales Advance MoM, Jun est 0.5% (0.8% prior) | |
Retail Sales Ex Auto MoM, Jun est 0.3% (0.9% prior) | |
Retail Sales Ex Auto and Gas, Jun est 0.4% (0.8% prior) | |
10 :00 AM | Business Inventories, May est 0.4% (0.3% prior) |
Canadian Economic Data
8:30 AM | Int’l Securities Transactions, May (9.13b prior) |
9:00 AM | Existing Home Sales MoM, Jun est 1.7% (-0.1% prior) |
10:00 AM | Bloomberg Nanos Confidence, Jul 13th (54.5 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
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