Market Update
Treasuries hold a tight higher price range in muted summer Friday trading. Meanwhile other overnight flows included light Japanese real money selling in Tsy intermediates. But Japanese accounts generally speaking have been buyers in Treasuries, said traders; and Japanese MOF data showed Japanese accounts bought Y947 Bln (US$8.3B) in foreign bonds in recent week, the 9th net purchase in 11 weeks. Canada May Retail sales +0.6% vs +0.3% expected. Ex autos -0.1% vs flat expected. Ex autos and gas flat. Total sales volume +1.1%. Core sales soft but April were strong.
News headlines
Euro Advance Persists as Politics Sink Dollar: Markets Wrap (Bloomberg) Bonds gained and the euro headed for its strongest level against the dollar since January 2015 on bets the European Central Bank will start tapering its stimulus program. European stocks fell as the common currency’s rally weighed on carmakers and other exporters.
ECB rate setters see decision on stimulus in October: sources (Reuters) European Central Bank policymakers see October as the most likely date to decide whether to claw back stimulus and consider December, an option flagged by staff, as too late, four sources with direct knowledge of the discussion said.
Bank Profits Near Pre-Crisis Peak in U.S. Despite All the Rules (Bloomberg) The last time big U.S. banks made so much money, the financial world was heading toward the brink of collapse. This time, it’s stiff regulation that’s in danger.
UK public finances suffer inflation hit, adding to Hammond’s headache (Reuters) Britain’s public finances deteriorated in June as rising inflation pushed up the government’s debt bill, driving home the challenge for finance minister Philip Hammond who is under pressure to loosen the public purse strings.
Exclusive: U.S. toughens stance on foreign deals in blow to China’s buying spree (Reuters) A secretive U.S. government panel has objected to at least nine acquisitions of U.S. companies by foreign buyers so far this year, people familiar with the matter said, a historically high number that bodes poorly for China’s overseas buying spree.
Here’s the Chain Reaction Trump Could Set Off by Trying to Fire Mueller (Bloomberg) President Donald Trump’s interview with the New York Times on Wednesday has stirred speculation he may consider firing Special Counsel Robert Mueller for investigating Trump’s business dealings as part of the Russia probe.
Overnight markets
Overview: US 10yr note futures are up 0.112% at 126-07, S&P 500 futures are down -0.02% at 2470.75, Crude oil futures are down -0.77% at $46.56, Gold futures are up 0.3% at $1255.8, DXY is down -0.18% at 94.132, CAD/USD is down -0.28% at 0.7964.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.243% | 2 Year | 1.348% |
| 5 Year | 1.505% | 5 Year | 1.811% |
| 10 Year | 1.88% | 10 Year | 2.246% |
| 30 Year | 2.246% | 30 Year | 2.815% |
US Economic Data
There is no major economic data release for today.
Canadian Economic Data
| 8:30 AM | CPI NSA, m/m, Jun, -0.1%, est. -0.1% (prior 0.1%) |
| CPI, y/y, Jun, 1.0%, est. 1.1% (prior 1.3%) | |
| CPI Core – Common, y/y, Jun, 1.4%, est. 1.3% (prior 1.3%) | |
| CPI Core – Trim, y/y, Jun, 1.2% (prior 1.2%) | |
| CPI Core- Median, y/y, Jun, 1.6% (prior 1.5%) | |
| Retail Sales, m/m, May, 0.6%, est. 0.3% (prior 0.8%, revised 0.7%) | |
| Retail Sales Ex Auto, m/m, May,-0.1%, est. 0.0% (prior 1.5%, revised 1.3%) |
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