Market Update
US tsys slightly higher, 10Y off the lows back above 2.0% (Thurs 1.97% 2.5 yr low), decent volume in TY futures (455k), tsys revered course after Trump called for air strikes. Fed Claria this morning on BB basically echoed Powell- Fed will act if appropriate. Core Euro bonds lower on stronger PMI data. French PMI came in better than exp (52 vs 50.8), 10Y bund ~3bps higher -0.30% , Eurozone PMI fell to the lowest in five and a half years in June. In Canada, GOCs are lower before April Retail Sales , a 0.2% reading expected after March’s huge 1.1% (1.7% ex-auto) gain.
News headlines
TSX futures drop on U.S.-Iran tensions (Reuters) Futures pointed to a lower opening for Canada’s main stock index on Friday, tracking declines in global equities as rising tensions between the United States and Iran kept investors on edge.
Dashboard of a downturn: global recession signals (Reuters) As the U.S.-China trade war erodes confidence and central banks prepare to unleash another wave of stimulus, investors are checking which advance warning indicators might be forecasting a global economic recession.
Clarida: Outlook is for continued U.S. expansion, but Fed prepared to act (Reuters) Federal Reserve Vice Chairman Richard Clarida said the Fed expects the U.S. economic expansion to continue but is prepared to reduce interest rates if trade and other uncertainties put that outlook at risk.
Brent oil up 6% in one week on fears of U.S. attack on Iran (Reuters) Brent oil rallied above $65 per barrel and was set to notch up a 6% gain this week on fears of a U.S. military attack on Iran that would disrupt flows from the Middle East, which provides more than a fifth of the world’s oil output.
Chevron Phillips Chemical in bid to acquire Nova Chemicals (Reuters) Chevron Phillips Chemical Company, a joint venture between Chevron Corp and Phillips 66, has offered to acquire Nova Chemicals Corp for more than $15 billion including debt, people familiar with the matter said on Thursday.
European central bankers claim oversight over Facebook’s cryptocurrency (Reuters) Three European central bankers are claiming oversight over Facebook’s planned virtual currency to ensure it will not jeopardize the financial system or be used to launder money.
Slack’s direct listing reference price is set at US$26 by NYSE for Thursday debut (FP) The New York Stock Exchange set a reference price of US$26 per share for trading in workplace messaging application Slack Technologies Inc.
The number is in line with the volume weighted average price at which the stock has been changing hands in the private markets. Slack said in a filing last month that number was US$26.82 for May, a slight increase from US$25.91 in April.
Market Overview: US 10yr note futures are down -0.22% at 127-25, S&P 500 futures are down -0.24% at 2952.75, Crude oil futures are up 0.51% at $57.36, Gold futures are up 0.27% at $1400.7, DXY is down -0.08% at 96.555, CAD/USD is up 0.01% at 0.7579.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.436% | 2 Year | 1.766% |
| 5 Year | 1.364% | 5 Year | 1.776% |
| 10 Year | 1.477% | 10 Year | 2.025% |
| 30 Year | 1.712% | 30 Year | 2.537% |
US Economic Data
| 09:45 AM | Markit US Manufacturing PMI, Jun P Survey: 50.5 Prior: 50.5 |
| Markit US Services PMI, Jun P Survey: 51.0 Prior: 50.9 | |
| Markit US Composite PMI, Jun P Survey: — Prior: 50.9 | |
| 10:00 AM | Existing Home Sales, May Survey: 5.30m Prior: 5.19m |
| Existing Home Sales MoM, May Survey: 2.10% Prior: -0.40% |
Canadian Economic Data
| 08:30 AM | Retail Sales MoM, Apr Survey: 0.20% Prior: 1.10% |
| Retail Sales Ex Auto MoM, Apr Survey: 0.40% Prior: 1.70% |
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