Market Update

US Treasuries open NY higher, flatter after overnight buying as US Senate GOP halts effort to push Obamacare healthcare repeal-&-replace bill; may be a later repeal-only bill. Tsys drew credit tied hedging buying in 5s and 10s, foreign real money accts bought 10s. US dollar/yen weakness aids Tsys bid.Tsys trailed core EGBs higher on weaker than expected German ZEW survey and soft UK CPI, PPI and RPI inflation.

News headlines 

Dollar Falls as U.S. Reform Hopes Dim; Gold Climbs: Markets Wrap (Bloomberg) The dollar slid back to a 10-month low as President Donald Trump’s economic revitalization agenda once again faltered. European stocks dropped as some earnings disappointed, and gold climbed to the highest in two weeks.

China’s property market slows, Beijing prices down for first time since 2015 (Reuters) Home prices in Beijing fell for the first time in more than two years in June, while Shanghai declined further and Shenzhen stalled, pointing to significant cooling in China’s biggest real estate markets, official data showed on Tuesday.

Pound Slides From 10-Month High as U.K. CPI Unexpectedly Falls (Bloomberg) The pound dropped from a 10-month high versus the dollar as U.K. inflation unexpectedly slowed in June, reducing the chances of an imminent interest-rate increase by the Bank of England. The yield on benchmark 10-year government bonds dropped to the lowest level since June.

German growth outlook positive despite sentiment dip: ZEW (Reuters) The growth outlook for the German economy remains positive, the ZEW institute said on Tuesday despite a fall in investor morale for the second consecutive month in July which economists attributed to a stronger euro.

Clean Energy Is Trouncing Oil, Gas and Coal in Trump Era (Bloomberg) President Donald Trump took office vowing to revive the coal industry’s fortunes. So far, the smart money has been on clean energy. An index of 40 publicly-traded solar companies, wind-turbine component makers and others that benefit from reduced fossil fuel consumption is up 20 percent this year.

Canada’s home sales fall most in 7 years, as Toronto market plunges (Financial Post) Home sales in June posted their largest monthly drop in seven years, driven by a plunge in the Greater Toronto market, the Canadian Real Estate Association said Monday. Transactions last month were down 6.7 per cent compared with May on a national basis, the third consecutive monthly decline, with the Greater Toronto Area registering a 15.1 per cent drop.

Overnight markets 

Overview: US 10yr note futures are up 0.087% at 125-28, S&P 500 futures are down -0.12% at 2455.5, Crude oil futures are up 1.65% at $46.78, Gold futures are up 0.42% at $1238.9, DXY is down -0.47% at 94.683, CAD/USD is down -0.77% at .7938.

US Economic Data 

8:30 AM Import Price Index, m/m, Jun, -0.2%, est. -0.2% (prior -0.3%, revised -0.1%)
Import Price Index, y/y, Jun, 1.5%, est. 1.3%  (prior 2.1%, revised 2.3%)
10:00 AM NAHB Housing Market Index, Jul, est. 67 (prior 67)
4:00 PM Total Net TIC Flows, May,  (prior $65.8b)
Net Long-Term TIC Flows, May, (prior $1.8b)

Canadian Economic Data

There is no major economic data release 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