US tsys opening lower & ~1bp steeper, US 10Y 2.17 (+3.7bps). Tsys pressured by some hawkish comments from Fed governors Bullard and Williams. Yet as corp supply is expected to pick up significantly this week (25-30bln after only 10bln last wk) while the US auction 2/5/7 this week with the 5Y at the most expensive on the curve since March 2014. In Canada, GOCs are lower led by 10s (~2bps), 1bp tighter vs tsys with longs outperforming for a second day after Fri saw a good amt of screen buying for cash and against 10s. Corps softer on Fri on rumours of NVCC supply , Hydro One downgrade. CMB new 5Y issue launched, ~48bps.
- The New Bond Market: Bigger, Riskier and More Fragile Than Ever (WSJ) Stocks rise and fall, but bonds are starting to make people anxious no matter what they do.The U.S. bond market is among the biggest financial markets in the world, with $39.5 trillion outstanding at mid-2015, the Securities Industry and Financial Markets Association says.
- Weak growth leads Moody’s to cut France’s credit rating (FT) Moody’s has lowered France’s government bond rating by one notch because of the country’s weak growth outlook — a move that overshadows the French government’s upbeat stance on the pace of recovery.
- Plunging oil prices put question mark over $1.5tn of projects (FT) Plunging oil prices have rendered more than a trillion dollars of future spending on energy projects uneconomic, according to a study that suggests that the impact on industry operators is worsening.
- Oil Speculators Most Bullish on U.S. Crude Price in Two Months (Bloomberg) Hedge funds slashed their bets on falling oil prices, leaving them the most bullish on U.S. crude futures in two months.
- Wall Street Tosses Out Bond-Trading Script After Fed Meeting (Bloomberg) Neil Bouhan at BMO Capital Markets expected the Federal Reserve to raise interest rates this week. Now he’s questioning all his views on the central bank.
- Canadian retailers poised to raise prices amid slumping loonie (G&M) Retailers are expected to hike prices in the coming months as they feel the pinch of a weak Canadian dollar and higher costs for imported goods.
- Leaders ignored TFSAs and OAS changes during debate (G&M) One of the most intriguing facets of last week’s leaders’ debate was the determination with which all candidates steered clear of two issues that directly affect your personal bottom line.
- Overview: IG25 5Y 81.62/82.06 (+3.588), US 10yr note futures are down -0.24% at 127-21, S&P 500 futures are up +0.46% at 1959.5, Crude oil futures are up +2.48% at 45.79, Gold futures are down -0.49% at $1132.2, DXY is up +0.74% at 95.569.
- US BANK CDS (5yr): BAC 72/76 (+0), GS 87/91 (+0), MS 78/82 (+0), C 80/84 (+0), JPM 71/75 (+0), WFC 52/56 (+0)
US Economic Data
- Existing home sales are forecast at 5.5M (-1.6% MoM) in August versus July 5.59M (2.0% MoM).
Canadian Economic Data
- Wholesale trade sales came in at 0.0% MoM in July worse than June 1.3% increase and lower than expected (0.8%).
- Bloomberg Nanos Canadian Confidence Index will be released today at 10:00am.
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