Market Update

US tsys lower, yields 2-3bps higher, curve slightly steeper 2s10s , 10Y 1.585%(+2.7bps), moderate volume in TY futures (350k).  US equity futures higher (+0.70%) with European stocks (Stoxx +1.3%), crude higher for 4th day 56.95 (+1.5%). Germany’s first 30Y auction with a zero coupon was uncovered with only E824mln in bids vs E2bln target, 30Y German yields fell to -0.28% last week. FOMC minutes this afternoon key event in the US later this aft. In Canada, CPI  is forecast to have risen 0.2% in July from -0.2% in June, mostly due to a 3% rebound rise in retail gas prices and seasonal airfare increases. The BOC auctions $4.2bln in Sep 24s at noon.

News headlines

U.S. Futures Climb as Treasuries Slip; Oil Gains: Markets Wrap (Bloomberg) U.S. equity futures climbed with European stocks after a mixed session in Asia as investors assessed the latest news on trade and awaited more clues on monetary policy. Treasury yields ticked higher and the dollar was steady.

TSX futures inch up on higher oil prices (Reuters) Futures for Canada’s main stock index edged higher on Wednesday, as oil prices rose after industry data showed a larger-than-expected drop in U.S. crude inventories.

Royal Bank of Canada profit misses on weak equity trading (Reuters) Royal Bank of Canada (RY.TO) missed analysts’ estimates for quarterly profit on Wednesday as equity trading weakened and it kept aside more funds to cover bad loans.

Trump says he had to ‘take China on,’ regardless of short-term impact on U.S. economy (Reuters) U.S. President Donald Trump said on Tuesday he had to confront China over trade even if it caused short-term harm to the U.S. economy because Beijing had been cheating Washington for decades.

Oil up 1 percent, buoyed by U.S. stock drawdown (Reuters) Crude oil futures rose on Wednesday after industry data showed a larger than expected drop in U.S. crude inventories, but gains were capped by lingering worries about a possible global recession.

U.S. is ‘very far from a recession,’ Trump says (BNN) President Donald Trump has consistently rejected a growing number of forecasts that his trade war with China and slowing global growth are pitching the U.S. economy toward recession. But he’s also spending a lot of time outlining policies to stave it off.

Germany readies for possible realities, such as disorderly Brexit (Reuters) Germany is preparing for a no-deal Brexit although Berlin would still prefer an orderly British divorce from the European Union, a German government spokesman said on Wednesday before Prime Minister Boris Johnson meets Chancellor Angela Merkel.

FOREX-Euro struggles vs dollar as attention turns to Fed (Reuters) The euro struggled to make headway against a resilient dollar on Wednesday and was stuck near $1.11, with forex markets mostly calm ahead of a crucial meeting of central bankers later this week.

Market Overview: US 10yr note futures are down -0.179% at 130-16, S&P 500 futures are up 0.68% at 2918, Crude oil futures are up 1.28% at $56.85, Gold futures are down -0.43% at $1509.2, DXY is down -0.05% at 98.141, CAD/USD is down -0.19% at 0.7522.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.362% 2 Year 1.534%
5 Year 1.228% 5 Year 1.459%
10 Year 1.192% 10 Year 1.581%
30 Year 1.424% 30 Year 2.06%

US Economic Data

07:00 AM MBA Mortgage Applications, Aug 16  Survey: —  Actual: -0.90% Prior: 21.70%
10:00 AM Existing Home Sales, Jul  Survey: 5.39m  Prior: 5.27m
       Existing Home Sales MoM, Jul  Survey: 2.30%  Prior: -1.70%
02:00 PM FOMC Meeting Minutes, Jul 31

Canadian Economic Data

08:30 AM CPI NSA MoM, Jul  Survey: 0.20%  Prior: -0.20%
         CPI YoY, Jul  Survey: 1.70%  Prior: 2.00%
         Consumer Price Index, Jul  Survey: 136.60  Prior: 136.30

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