Market update
US tsys marching higher on weaker NY Empire survey, curve flatter US 10Y 2.165 (-4bps), with focus on commodities as crude trades at new low below 42. Core EU bonds higher led by 10Y gilts (-4bps). Comments on Greek bail-in debt also supporting tsys, with Greek senior bank debt falling on prospect of losses as a condition of bailout. In Canada, GOCs are higher led by 10s (-3bps). Provis opening with heavy tone, supply expected this week.
News headlines
- Oil Price Starts the Week in the Red (WSJ) The oil price kicked off the week in the red as the market remained under selling pressure, with U.S. oil prices dropping below $42 a barrel.
- Divergent inflation trends complicate rate moves in U.S., Canada (GI) In the intense discussion about I the fast-evolving interest rate policy at North America’s central banks, somewhat lost in all the intrigue has been the critical role of inflation. The trend in consumer prices could still prove the pivotal factor in rate decisions on both sides of the Canada-United States border – and we’ll get an update on the numbers for both countries at a key policy juncture this week.
- Japan’s economy contracts in second quarter (FT) The Japanese economy shrank at an annualised rate of 1.6 per cent in the second quarter of 2015, in a blow to Prime Minister Shinzo Abe’s hopes of reviving the country’s growth.
- BOE Official Says Don’t Wait Too Long on Rates (WSJ) The Bank of England is under no immediate pressure to raise interest rates in the U.K., but officials shouldn’t wait too long to do so, one of the central bank’s nine policy makers said on Monday.
Overnight markets
- Overview: IG24 5Y 76.6/77 (+0.3), US 10yr note futures are up +0.29% at 127-23+, S&P 500 futures are down -0.36% at 2082.0, Crude oil futures are down -1.76% at 41.75, Gold futures are up +0.65% at $1119.9, DXY is up +0.10% at 96.617.
US Economic Data
- Empire manufacturing decreased to -14.92 in August from a reading of 3.86 in July. Analysts had expected the index to rise to 4.5.
- Net long-term TIC flows for June will be release at 16:00.
Canadian Economic Data
- Int’l securities transactions for April came in at 8.51B, higher than previous month (-5.46B).
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