Market Update
Tsys higher on moderate volume (TY 375k) , long end outperforming, 10Y 1.57 (-3.6bps). US equity futures flat, crude unch @ 56.00. Home Depot +2.5% pre-mkt on optimistic outlook for consumer spending & housing. Limited data in the US with focus on July FOMC minutes and start of Jackson Hole Friday. German bunds higher, EU peripherals wider led by Italy as Salvini offers tax cuts, spending worth E50bln in 2020 budget proposal. GOCs higher with tsys, yields 2-3bps lower, 10Y 1.15%. Longs lagging yest with combination of CGB block buyer and long Ontario issue pressuring 10s30s 1bp wider
News headlines
Stocks Drift as Trade, Economic Momentum Mulled: Markets Wrap (Bloomberg) U.S. index futures drifted with stocks in Europe as investors digested developments in trade talks and comments from a Federal Reserve official about the strength of the biggest economy. Treasuries climbed and a gauge of the dollar held close to the year’s high.
U.S. yield curve: Invert, steepen, repeat (Reuters) A swift steepening of the U.S. 2-year/10-year yield curve after it inverted last week may have given investors hope that the United States can escape recession. They should probably take a breath.
TSX futures edge up on higher gold prices (Reuters) Futures for Canada’s main stock index inched up on Tuesday, supported by firmer gold prices against the backdrop of global growth concerns.
Oil Steadies as U.S.-China Trade Progress Allays Demand Concerns (Bloomberg) Oil steadied near $56 a barrel as hints of a trade detente between the U.S. and China, along with the prospect of monetary stimulus, buoyed financial markets.
Huawei founder details ‘battle mode’ reform plan to beat U.S. crisis (Reuters) China’s Huawei will spend more on production equipment this year to ensure supply continuity, cut redundant roles and demote inefficient managers as its grapples with a “live-or-die moment” in the wake of U.S. export curbs, founder Ren Zhengfei said.
Japan allows further exports of high-tech material to South Korea (reuters) Japan has approved shipments of a high-tech material to South Korea for the second time since imposing export curbs last month, two sources said, ahead of talks by government officials this week to resolve a dispute stemming from their wartime past.
Fed’s Rosengren wants evidence of slowdown to justify rate cut (BNN) Federal Reserve Bank of Boston President Eric Rosengren continued to push back against further interest-rate cuts by the central bank, arguing he’s not convinced that slowing trade and global growth will significantly dent the U.S. economy.
Trump’s Trade War Is Keeping the Dollar Strong, Not the Fed (Bloomberg) Donald Trump has blamed the stubbornly strong dollar on the Federal Reserve’s reluctance to slash interest rates further. But real yields suggest investors fearful of the president’s trade war are what’s keeping the greenback strong.
Market Overview: US 10yr note futures are up 0.12% at 130-19, S&P 500 futures are up 0.09% at 2926.5, Crude oil futures are down -0.48% at $55.94, Gold futures are up 0.22% at $1515, DXY is up 0.04% at 98.39, CAD/USD is up 0.05% at 0.7502.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.334% | 2 Year | 1.521% |
| 5 Year | 1.188% | 5 Year | 1.446% |
| 10 Year | 1.151% | 10 Year | 1.574% |
| 30 Year | 1.374% | 30 Year | 2.058% |
US Economic Data
There is no US economic data for today.
Canadian Economic Data
| 08:30 AM | Manufacturing Sales MoM, Jun Survey: -1.80% Prior: 1.60% |
| Teranet/National Bank HPI MoM, Jul Survey: — Prior: 0.80% |
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, Émile Bordeleau
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