23/07/2015

Market update

US tsys opening higher, curve slightly steeper led by 5Y 10Y trading just below key 2.32% resist (2.315 -0.5bps). Core Euro bonds higher, bund futures eclipsed prev high 153.34 in early European session despite positive Greek news (reform vote see above). large month end extensions Volumes way below avg in tsy futures according to MNI. Key events for today – initial claims & 10Y TIPS auction at 1:00. In Canada, GOCs lower after relatively upbeat May retail sales rose 1.0% vs 0.6% exp, thou is real terms sales were up a more modest 0.4% and car sales accounting for a bulk of the overall increase, rising 2%m/m.

International news

•UK retail sales slip unexpectedly in June, second quarter soft (Reuters) British retail sales suffered an unexpected dip last month as consumers bought fewer household goods, pushing the annual rate of spending growth for the quarter to its lowest in more than two years.

•Tsipras secures backing of Greek MPs for crucial reforms (FT) The Greek parliament backed a second round of reforms demanded by creditors early on Thursday but the vote revealed a deepening rift in the radical leftwing Syriza party of Alexis Tsipras, the prime minister.

•How a Chinese Company Slipped on Canada’s Oil Sands (WSJ) China’s Cnooc Ltd. knew it was buying into trouble when it acquired Canada’s Nexen Inc. in 2013. It is now finding out just how much.

Overnight markets

•Overview: IG24 5Y 68.8/69.3 (+0.55), US 10yr note futures are up +0.07% at 126-13, S&P 500 futures are up +0.07% at 2109.5, Crude oil futures are up +0.41% at 49.39, Gold futures are up +0.77% at $1099.9, DXY is down -0.61% at 97.005.
•US BANK CDS (5yr): BAC 68/72 (+0), GS 85/89 (+0), MS 77/81 (+0), C 76/80 (+0), JPM 68/72 (+0), WFC 51/55 (+0)

US Economic Data

•Chicago Fed National activity index came in at 0.08 in June (-0.05 expec.) and better than May revised number of -0.08.
•Initial jobless claims came in at 255K for the week ending July 18th, lower than expected (278K) and prior week (281K).
•Continuing claims decreased to 2207K from 2216K and lower than expected (2233K).
•Leading index is forecast to increase 0.3% in June better than May 0.7%.
•Kansas City Fed manufacturing index is forecast at -5 in July higher than June level (-9).

Canadian Economic Data

•Retail sales went up 1.0% MoM in May, better than expectations of a 0.6% increase, after decreasing -0.1% previous month.

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.

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