Market Update Tsys higher on ‘risk off’ as Turkish lira falls for the first day in four, US Tsy sec Mnuchin threatening further sanctions on Turkey. Also reports Germany/Turkey talked about IMF rescue. US equity futures lower, S&P -7, Nasdaq – 27. GOCs higher before July CPI -consensus calling for a 2.5% increase. Provis trading down to start, Ont 28s @ 68, Ont 48s @82. Ontario back in the mkt yesterday after an extended hiatus selling $1bln 10Y bonds @68 and $2.65bln 5Y Aug 21 2023 FRN @ 3M CDOR +5bps. Both deals went well, 10s closed 67/66 while the FRNs were upsized from $2bln, and @ 3M CDOR +5 looked expensive vs. Ont 5Y fixed ASW. Bell Canada issued $750mln in new 10Y @ 155.5 (vs 158 init guid),closed 154/151.
News headlines
Canada annual inflation rate rises to 3 percent in July (Reuters) Canada’s annual inflation rate in July rose to 3.0 percent as prices in all eight major components increased year-over-year, Statistics Canada said on Friday.
Trump Pushes China for Better Deal With Trade Talks Set to Resume (Bloomberg) President Donald Trump prodded China to offer more at the bargaining table as the two countries prepared for their first major negotiation in more than two months in an effort to head off an all-out trade war.
Turkey’s lira weakens more than 6 percent on threat of more U.S. sanctions (Reuters) Turkey’s battered lira weakened more than 6 percent against the dollar on Friday, after a U.S. warning that Ankara should expect more economic sanctions unless it hands over detained American evangelical pastor Andrew Brunson. Turkish banks moved to ease access to credit for companies as the prospect of further U.S. sanctions and a review of the nation’s debt sent new convulsions through financial markets.
Trump asks SEC to mull half-year corporate filings vs quarterly (Reuters) U.S. President Donald Trump said on Friday he has asked the U.S. Securities and Exchange Commission to study the impact of allowing companies to file reports with the financial regulator every six months instead of every quarter.
Russian oil industry would weather U.S. ‘bill from hell’ (Reuters) Stiff new U.S. sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology.
Greece set to exit bailout, still faces daunting challenges. (Reuters) Greece exits the last of its three bailouts on Aug. 20 and hopes to be able to borrow again in international markets after a nearly nine-year debt crisis that shrank the economy by a quarter and forced it to implement painful austerity measures.
Investors flee risk as bear markets multiply: BAML (Reuters) Investors pulled billions from equities this week, shifting into bonds and high dividend-yielding sectors as Turkey’s currency crisis sparked a global selloff and emerging markets entered bear territory, an analysis of fund flows showed on Friday.
Overnight markets
Overview: US 10yr note futures are up 0.078% at 120-12, S&P 500 futures are down -0.24% at 2838, Crude oil futures are up 0.82% at $66, Gold futures are up 0.08% at $1184.9, DXY is down -0.26% at 96.392, CAD/USD is down -0.64% at 0.7649.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.118% | 2 Year | 2.612% |
| 5 Year | 2.208% | 5 Year | 2.736% |
| 10 Year | 2.274% | 10 Year | 2.861% |
| 30 Year | 2.283% | 30 Year | 3.022% |
US Economic Data
| 10:00 AM | Leading Index, July est 0.4% (0.5% prior) |
| U. of Michigan Sentiment, Aug P est 98 (97.9 prior) |
Canadian Economic Data
| 8:30 AM | CPI NSA MoM, July 0.5% est 0.1% (0.1% prior) |
| CPI YoY, July 3.0% est 2.5% (2.5% prior) | |
| Consumer Price Index, July 134.3 est 133.6 (133.6 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