Market Update
US tsys lower, 10Y 2.167% (+1bp), on moderate volume in TY futures (250k). Tsys pressured lower in Europe as gilts tumbled on hawkish comments from BOE Haldane said rates may have to move higher in the second half of the yr. Bunds mixed, longer maturities outperforming after solid 30Y auction. The BOC is scheduled to auction $3bln in reopened June 27s, the second 10Y auction this qtr. The 10Y roll (27/26) is opening unch 8.6/8.5 – having flattened ~3bps since month end consistent with the broader flattening in the broader 5s10s curve after the BOC’s hawkish tone. 10s have retraced ~4 bps of their 17bp move higher since the lows as long term US tsy yields have been pressured lower. AIMCO Realty has launched its 7Y this morning @ 100bps +/-3bps.
News headlines
Oil Slide Weighs on Stocks; Haven Assets Advance: Markets Wrap (Bloomberg) Global stocks retreated and the yen strengthened after oil tumbled into a bear market on concern a supply glut will persist. Havens including bonds, the yen and gold gained.
Britain’s May promises to listen on Brexit as queen presents government program (Reuters) British Prime Minister Theresa May promised on Wednesday to listen more to businesses’ concerns about Brexit as Queen Elizabeth formally opened parliament by announcing the government’s program for the next two years.
China shares get MSCI nod in landmark moment for Beijing (Reuters) China’s stocks took a major step toward global acceptance on Wednesday, finally winning a long campaign for inclusion in a leading emerging markets benchmark, in what was seen as a milestone for global investing.
BOJ’s Kuroda: need to stick with easing, watch price trend (Reuters) Bank of Japan Governor Haruhiko Kuroda said maintaining the current easy monetary conditions is appropriate because prices are lagging improvements in the economy and remain distant from the central bank’s inflation target.
Sears Canada Is Said to Prepare to Seek Creditor Protection (Bloomberg) Sears Canada Inc., the struggling offshoot of Sears Holdings Corp., is preparing to seek court protection from creditors in the coming weeks, according to people familiar with the matter.
Saudi King’s Surprise Shakeup Clears Son’s Path to the Throne (Bloomberg) The abrupt shake-up that made Saudi Prince Mohammed bin Salman heir to his father’s throne gives the 31-year-old extraordinary powers to push through his vision to wean the economy off oil and exert his influence in regional conflicts.
Overnight markets
Overview: US 10yr note futures are down -0.136% at 126-19, S&P 500 futures are down 0% at 2437.5, Crude oil futures are up 0.41% at $43.69, Gold futures are up 0.05% at $1244.1, DXY is down -0.16% at 97.606, CAD/USD is up 0.17% at 0.7524.
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Jun 16, 0.6% (prior 2.8%) |
| 10:00 AM | Existing Home Sales, May, est. 5.55m (prior 5.57m) |
| Existing Home Sales, m/m, May, est. -0.4% (prior -2.3%) |
Canadian Economic Data
There is no major economic news 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.
Tel : (514)-861-0240
Fax: (514)-861-3230