Market Update
Tsys break higher out of the range, as more buying coming in, 10-year note is at 2.255%, around session low yields. Tsys see 2/7Y, 2/30Y flattening. – TIPS also doing well, outperforming nominal Tsys in fact for another day, today’s 1pm ET $13B 10Y TIPS auction. Tsys holding near early session highs post data, volume rather light still, some rate paying by props and real$ in long end, fast$ buying 10s so far. Sep Bunds now trading close to level seen before ECB monetary policy decision as markets react to comments from ECB President Draghi. Sep Bund last 18 ticks lower at 161.74
News headlines
Stocks Trade Near Record Before ECB; Dollar Rises: Markets Wrap (Bloomberg) Central banks were once again front and center in global markets on Thursday, with stocks trading near a record as investors await the ECB’s latest rate decision. The Bank of Japan maintained its mega monetary stimulus, sinking the yen and lending momentum to a dollar advance.
Major central banks to turn up policy heat despite low-burn inflation: Reuters poll (Reuters) Expectations are firming for major central banks to turn further away from ultra-easy monetary policy despite scant evidence of a pickup in inflation, Reuters polls of more than 500 economists showed on Thursday.
China unveils plan to become a world leader in AI by 2025 (Reuters) China unveiled a national artificial intelligence (AI) development plan on Thursday, laying out its ambitions to build world-leading technology amid heightened international friction over applications of AI in military technology.
BOJ pushes back inflation target for sixth time, keeps policy steady (Reuters) The Bank of Japan kept monetary policy steady on Thursday but once again pushed back the timing for achieving its ambitious inflation target, reinforcing views it will lag well behind other major central banks in scaling back its massive stimulus program.
May Urged to Reassure Businesses Over Her Brexit Strategy (Bloomberg) U.K. Prime Minister Theresa May will be urged to do more to reassure businesses about her Brexit plans, as she begins her first serious consultation with companies on the subject more than a year after taking office.
France Says ‘We Want Our Money Back’ as Brexit Talks Crawl On (Bloomberg) France insisted that the U.K. pay a Brexit bill of as much as 100 billion euros ($115 billion), underlining the hurdles to substantial progress in negotiations toward a new relationship with the European Union.
Overnight markets
Overview: US 10yr note futures are down 0% at 126-02, S&P 500 futures are up 0.1% at 2474, Crude oil futures are up 0.62% at $47.41, Gold futures are down -0.32% at $1238, DXY is up 0.3% at 95.064, CAD/USD is up 0.04% at 0.793.
US Economic Data
| 8:30 AM | Initial Jobless Claims, Jul 15, 233k, est. 245k (prior 247k, revised 248k) |
| Continuing Claims, Jul 8, 1977k, est. 1949k (prior 1945k, revised 1949k) | |
| Philadelphia Fed Index, Jul, 19.5, est. 23.0 (prior 27.6) | |
| 9:45 AM | Bloomberg Consumer Comfort Index, Jul 16, (prior 47.0) |
| Bloomberg Economic Expense, Jul, (prior 52.0) | |
| 10:00 AM | Leading Indicator, Jun, est. 0.4% (prior 0.3%) |
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.
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