Market Update
US tsys close to overnight lows , prices extending losses in recent trade on hawkish comments from Fed’s Esther George saying the Fed is not ready to provide more accommodation, while easing further creates more risk – US 10Y 1.62% (+3bps). Equities slightly higher, crude +0.70%, gold consolidating ~1500. Core Euro bonds lower on stronger regional PMIs, ECB minutes. Focus on start of Jackson Hole conference and Fed Powell speech at 10:00am Friday. In Canada, GOCs 3bps wider since July CPI came in slightly firmer yest.
News headlines
U.S. Stock Futures Drift; Dollar Climbs With Oil: Markets Wrap (Bloomberg) U.S. equity futures fluctuated and Europe stocks dipped as traders parsed economic data and awaited an address by the Federal Reserve chief on Friday. The dollar climbed with oil, while gold dipped.
Oil Steadies as Traders Await Signs on U.S. Monetary Policy (Bloomberg) Oil steadied after its first drop this week as attention turned from expanding American fuel stockpiles to the prospects for monetary easing as the world’s top central bankers gather in Jackson Hole, Wyoming.
OPEC’s market share sinks – and no sign of wavering on supply cuts (Reuters) OPEC’s share of the global oil market has sunk to 30%, the lowest in years, as a result of supply restraint and involuntary losses in Iran and Venezuela, and there is little sign yet producers are wavering on their output-cut strategy.
Fed doubts dominate as futures tick lower (Reuters) Wall Street’s main markets were set to edge lower on Thursday as the previous session’s hints of a skeptical Federal Reserve attitude to a new cycle of interest rate cuts offset a handful of more bullish signs from U.S. retailers.
On the front lines: Trade war sinks North Dakota soybean farmers (Reuters) COLFAX, North Dakota (Reuters) – North Dakota bet bigger on Chinese soybean demand than any other U.S. state.
Fed’s George reiterates opposition to July rate cut: CNBC (Reuters) Kansas City Federal Reserve Bank President Esther George reiterated her opposition to the rate cut that the U.S. central bank implemented in July.
ECB eyes stimulus package as growth looks weaker: minutes (Reuters) European Central Bank policymakers are concerned that growth is even weaker than earlier thought and a package of measures may be the best way to combat the slowdown, the accounts of the July 25 meeting showed on Thursday.
The Fed’s three reasons for cutting in July support another move (BNN) Federal Reserve officials viewed their interest-rate cut last month as insurance against headwinds from the trade war and low inflation — reasons that look even sharper as they move toward their meeting in September.
Canada’s Trudeau says won’t back down in dispute with China, urges restraint in Hong Kong (Reuters) Canadian Prime Minister Justin Trudeau said on Wednesday he would not escalate a deepening trade and diplomatic dispute with China but added that his government had no intention of backing down as it defended its interests.
Market Overview: US 10yr note futures are down -0.275% at 130-06, S&P 500 futures are up 0.15% at 2933.75, Crude oil futures are up 0.84% at $56.15, Gold futures are down -0.8% at $1503.6, DXY is up 0.02% at 98.318, CAD/USD is down -0.07% at 0.7529.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.432% | 2 Year | 1.594% |
| 5 Year | 1.31% | 5 Year | 1.506% |
| 10 Year | 1.268% | 10 Year | 1.622% |
| 30 Year | 1.494% | 30 Year | 2.099% |
US Economic Data
| 08:30 AM | Initial Jobless Claims, Aug 17 Survey: 216k Prior: 220k |
| Continuing Claims, Aug 10 Survey: 1707k Prior: 1726k | |
| 09:45 AM | Bloomberg Consumer Comfort, Aug 18 Survey: — Prior: 61.20 |
| Bloomberg Economic Expectations, Aug Survey: — Prior: 55.00 | |
| Markit US Manufacturing PMI, Aug P Survey: 50.5 Prior: 50.4 | |
| Markit US Services PMI, Aug P Survey: 52.8 Prior: 53.0 | |
| Markit US Composite PMI, Aug P Survey: — Prior: 52.6 | |
| 10:00 AM | Leading Index, Jul Survey: 0.30% Prior: -0.30% |
Canadian Economic Data
| 08:30 AM | Wholesale Trade Sales MoM, Jun Survey: -0.20% Prior: -1.80% |
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