Market update

US tsys trading unch on low volume in narrow o/n range, US 10Y 2.07%. Tsys rose initially in weak China data (see above) but gave up gains in Europe after stronger PMIs. Euro stocks ~1.3% lower, gold & oil lower as well. Triple with today likely to add to volatility in equities. Core EU bonds mixed, gilts sharply higher. In Canada, GOCs slightly higher after CPI/Retail Sales with the latter up 0.6% vs 0.2% exp.  Provis opening wider , Ont 45s traded up @97 earlier now 97.5/96.5 , Qc 45s 105/104 +0.5bps.

News headlines

  •  No End in Sight for Oil Glut (WSJ) When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short-lived. Instead, the price of crude has plunged by almost 60% from its 2014 peak—and suddenly looks likely to stay low for months and maybe years to come.
  • China August Manufacturing Activity Hits Lowest Level Since 2009 (WSJ) An early gauge of China’s factory activity fell to a six-and-a-half year low in August despite China’s efforts to reinvigorate slowing economic growth.
  • Weaker euro boosts eurozone export orders (FT) The eurozone’s recovery strengthened a little this month as the weaker euro led to a rise in new export orders for the region’s businesses, according to an influential poll of the region’s purchasing managers.
  • Greek bonds rally on hopes of QE buying (FT) Greek government bonds, pariah of global markets for much of this year, are back in favour once again as investors bet that the country’s latest rescue deal has left it on the cusp of inclusion in Europe’s €1.1tn bond buying programme.

Overnight markets

  • Overview: IG24 5Y 80.7/81.2(-0.05), US 10yr note futures are up +0.17% at 128-17+, S&P 500 futures are down -0.68% at 2011.75, Crude oil futures are down -0.63% at 41.06, Gold futures are up +0.39% at $1157.70, DXY is down -0.70% at 95.311.
  • US BANK CDS (5yr): BAC 73/77 (+0), GS 93/97 (+0), MS 83/87 (+0), C 83/87 (+0), JPM 74/78 (+0), WFC 54/58 (+0)

 US Economic Data

  • Markit US Manufacturing PMI (Preliminary) is forecast at 53.8 for August, equal to previous month.

Canadian Economic Data

  • Retail sales went up 0.6% MoM in June, better than expectations of a 0.2% increase, after increasing 0.9% previous month.
  • CPI decrease 0.1% MoM (1.3% YoY) in July (0.1% MoM and 1.3% YoY Expec) versus June 0.2% MoM (1.0% YoY).
  • CPI core came in at 0.0% MoM (2.4% YoY) in July (0.0% MoM and 2.4% YoY Expec) compared to previous month 0.0% MoM (2.3% YoY).

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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230