Market Update

US Tsys prices open higher after overnight improvement, just off top end late overnight highs on light overnight volume, quiet start to wk with limited second tier data (Empire Manuf Index, 14.0 est) and black-out ahead next week’s FOMC announcement on Wed. Equities firmer (eminis +2.0, 2458.0), oil little softer (WTI -0.12, 46.42), gold firmer (+3.79,1232.47). Foreign investments in Cdn securities +C$29.5b, mostly government bonds (record C$14.5b). Canadian investments in foreign securities +C$4.4b. A reading of New York-area manufacturing cooled in July from a two-year high, according to data released Monday. The New York Fed’s Empire State manufacturing index fell to a seasonally adjusted reading of 9.8 from 19.8 in June. Economists polled by Econoday expected a reading of 15, on a scale where any figure above zero indicates improving conditions.

News headlines 

Data in Driving Seat as Metals Rally, Stocks Swing: Markets Wrap (Bloomberg) Economic data was the key driver for markets on Monday, with industrial metals and mining companies rallying on better-than-expected Chinese growth and stocks fluctuating after European inflation figures. The U.S. dollar steadied while the euro and pound fell as Brexit negotiations resumed.

Oil edges up towards $49, U.S. drilling slowdown supports (Reuters) Oil edged up to around $49 a barrel on Monday as a slowdown in the increase of rigs drilling in the United States eased concern that surging shale supplies will undermine OPEC-led cuts.

China’s strong second-quarter GDP growth paves way for deeper reforms (Reuters) China’s economy expanded faster-than-expected in the second quarter, setting the country on course to comfortably meet its 2017 growth target and giving policymakers room to tackle big economic challenges ahead of key leadership changes later this year.

Euro zone June inflation slowdown confirmed, but core rate rises (Reuters) Euro zone headline inflation slowed in June but the core figure excluding volatile unprocessed food and energy rose, the European Union’s statistics office said on Monday, confirming its earlier flash estimates.

ECB eyes review of Deutsche Bank shareholders: source (Reuters) Europe’s top banking regulator, the European Central Bank (ECB), is considering carrying out a review of Deutsche Bank’s (DBKGn.DE) two largest shareholders, a regulatory source said on Monday.

Loonie must go up more to kill foreign interest in Canadian real estate (Financial Post) Canadian real estate became more expensive for foreign investors over the past week, but the loonie probably needs to keep moving higher if it’s really going to cool off overseas demand.

Quebec Expects $1.2 Billion in Savings With New Drug-Price Deal (Bloomberg) Quebec said it will save at least C$1.5 billion ($1.2 billion) over five years after reaching an agreement with pharmaceutical companies to lower prices for generic drugs.

Overnight markets 

Overview: US 10yr note futures are up 0.075% at 125-25, S&P 500 futures are up 0.03% at 2456.75, Crude oil futures are down -0.09% at $46.5, Gold futures are up 0.45% at $1233, DXY is up 0.01% at 95.159, CAD/USD is up 0.05% at 0.7904.

US Economic Data 

8:30 AM Empire Manufacturing, Jul, 9.8, est. 15.0 (prior 19.8)

 Canadian Economic Data

8:30 AM Int’l Securities Transactions, May,  (prior 10.60b)
9:00 AM Existing Home Sales, m/m, Jun, (prior -6.2%)
10:00 AM Bloomberg Nanos Confidence, Jul 14, (prior 58.3)


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