Market Update Tsys trading close to unch, in narrow overnite range, 10Y 2.83%, on above avg volume (~390k TY futures), thou the Sep/Dec roll accounting for much of the vol. Core EGBs weaker, with Italian BTPs weaker despite news Trump offered to buy Italian bonds next year in his meeting with Italian PM Conte three weeks ago. GOCs unch as well, the 5s30s curve flattened 3bps over the last week to new lows @ 5bps , 10s30s close to inversion (0.2bps). Quebec returned to the mkt yest issuing $500mln 30Y bonds @79,which was well received closing 79/78.
News headlines
Trudeau Says He Won’t Settle for Bad Nafta as Talks Continue (Bloomberg) Canadian Prime Minister Justin Trudeau is preaching some caution on expectations for Nafta talks, saying he’s encouraged by the latest optimism but won’t sign just any deal. Trudeau spoke Thursday in British Columbia at the conclusion of a cabinet meeting, amid U.S.-Mexico talks that are said to be nearing a deal on autos, a key Nafta subject. Trudeau said the latest news has been encouraging while also saying there’d been progress in previous months, too. He said Canada was looking forward to rejoining talks but gave no indication of when that would be.
How Trump Story on Cohen’s Hush-Money Payments Shifted Over Time (Bloomberg) President Donald Trump and his aides and lawyers have made vague and shifting statements about his alleged affairs with two women and arrangements to buy their silence before the 2016 election. Trump, the White House and his lawyers have had at least 25 opportunities since January to describe the president’s role in the hush-money payments and explain when he first learned of them. Their answers have been imprecise and inconsistent, and at no time have they provided a full explanation of Trump’s involvement.
Stocks Advance as Trade Talks End; Dollar Slips: Markets Wrap (Bloomberg) U.S. equity-index futures rose alongside stocks in Europe following a mixed session in Asia after trade negotiations with China drew a blank. Oil and most commodities rallied as the dollar slipped with Treasuries before an address from Federal Reserve Chairman Jerome Powell. Energy majors led the advance in the Stoxx Europe 600 Index as crude gained along with industrial metals. Futures on the Dow, S&P 500 and Nasdaq indexes climbed while China and Hong Kong equities underperformed as trade talks wound up with no major progress. Shares in Japan and South Korea rose. Treasuries edged lower with the greenback as investors awaited Powell’s scheduled comments at the Jackson Hole retreat later Friday.
Canada PM says in diplomatic talks with Saudi Arabia (Reuters) Canada’s Prime Minister Justin Trudeau said on Thursday that his government is engaging diplomatically with Saudi Arabia, but did not back down on his concerns about human rights, two weeks into a spat over Ottawa’s calls for the release of Saudi activists from detention. “We continue to engage diplomatically with Saudi Arabia, I think it’s important to have positive relationships with countries around the world,” Trudeau told reporters after Cabinet meetings in British Columbia. Trudeau was responding to a question on reports that Saudi Arabia’s prosecutor is seeking the death penalty against rights activists.
Enbridge to buy Spectra Energy Partners for $3.3 billion (Reuters) Enbridge Inc (ENB.TO), Canada’s largest pipeline operator, said on Friday it would buy its U.S. master limited partnership Spectra Energy Partners (SEP.N) for a sweetened $3.3 billion deal. The company said the deal represents a exchange ratio of 1.111 common shares for each unit of Spectra, representing an increase of 9.8 percent from its initial offer.
Top court paves way for Toronto realtors to unlock key sales data (BNN) The Supreme Court of Canada has refused to hear an appeal from the country’s largest real estate board that would have prevented its members from posting home sales data on their websites, ending a years-long battle in a case that could have sweeping implications for consumer access across the country. Canada’s top court announced Thursday it has dismissed the application from the Toronto Real Estate Board, which represents more than 50,000 Ontario agents. “I’m glad we’re one step closer to giving people more access to information,” said John Pasalis, president, Realosophy Realty, in an interview with BNN Bloomberg Thursday. “The more information people have, the better decisions that they can make – and that’s the core of what’s going on here.”
U.S. sanctions showing cracks in Putin’s armour (BNN) The upheaval set off by the threat of American sanctions is roiling the Kremlin’s economic plans even before the U.S. announces a new round of penalties. The speculation alone was enough to put Russian assets under such pressure that the authorities had to look for policy compromises. With the turmoil gripping other emerging nations, President Vladimir Putin’s government is already adjusting down its outlook for the economy, bracing for growing outflows of capital and a weaker currency.
Overnight markets
Overview: US 10yr note futures are down -0.091% at 120-16, S&P 500 futures are up 0.2% at 2863.75, Crude oil futures are up 1.14% at $68.6, Gold futures are up 0.39% at $1198.7, DXY is down -0.36% at 95.318, CAD/USD is down -0.12% at 0.7654.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.132% | 2 Year | 2.616% |
| 5 Year | 2.22% | 5 Year | 2.724% |
| 10 Year | 2.268% | 10 Year | 2.83% |
| 30 Year | 2.273% | 30 Year | 2.979% |
US Economic Data
| 8:30 AM | Durable Goods Orders, Jul est -1.0% (0.8% prior) |
| Durables Ex Transportation, Jul est 0.5% (0.2% prior) | |
| Cap Goods Orders Nondef Ex Air, Jul est 0.5% (0.2% prior) | |
| Cap Goods Ship Nondef Ex Air, Jul est 0.3% (0.7% prior) |
Canadian Economic Data
There is no Canadian economic data 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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230