Market Update
US tsys higher on avg volume (320k TY futures), US 10Y 1.70% (-2bps), flattening in UST curve with 3m10Y -20bps close to middle of -50 to +5 range over past month. NY Fed repo operation bought $30bln in 14 day repo and was 2x oversubscribed. UK gilts rallied after Supreme Court ruled PM Boris Johnson’s suspension of parliament was unlawful, 10Y gilt future at weekly high. GOCs higher, in line with tsys, 10s30s 1bp steeper last two days after sharp narrowing since late Aug. On Thursday the BOC will conduct a switch operation, buying back off the run 33s,37s & 41s in exchange for Dec 51s with a maximum of $400mln. Eco data calendar picks up only next week with July GDP.
News headlines
Stocks Climb on Trade Optimism; Treasuries Edge Up: Markets Wrap (Bloomberg) U.S. equity-index futures advanced with European stocks while Asian shares rose modestly as investors weighed hopes for high-level trade talks next month between America and China against mixed economic data from around the globe. The pound rose after a court ruling key to Brexit.
TSX futures advance on U.S.-China trade hopes (Reuters) Futures for Canada’s main stock index rose on Tuesday on trade optimism after Washington said the United States and China would resume trade talk in two weeks.
Oil Slips on Signs of Returning Saudi Output as Doubts Linger (Bloomberg) Oil edged lower on signs Saudi Arabia is making progress in restoring lost output even as uncertainty remains about the kingdom’s ability to meet its timeline of a full return by the end of the month.
China grants new tariff waivers for U.S. soybean imports: Bloomberg (Reuters) China has granted new waivers to several domestic state and private firms exempting them from retaliatory tariffs on soybeans imported from the United States, Bloomberg said, citing unidentified sources familiar with the matter.
Pound rallies, stocks slip on UK Supreme Court ruling (Reuters) Sterling extended gains on Tuesday while eurozone stocks tumbled after Britain’s Supreme Court ruled that British Prime Minister Boris Johnson had acted unlawfully when he advised Queen Elizabeth to suspend Parliament this month.
BOJ’s Kuroda says any easing will target short-, medium-term rates (Reuters) Bank of Japan Governor Haruhiko Kuroda said on Tuesday that if the central bank were to ease monetary policy further, it would aim at pushing down short- and medium-term interest rates without flattening the yield curve too much.
Argentina’s markets, caged by controls, strain beneath the surface (Reuters) Argentina’s volatile markets look to have been tamed by capital controls imposed by President Mauricio Macri after a sharp sell-off in August. Beneath the surface, however, signs suggest trouble is brewing.
Market Overview: US 10yr note futures are up 0.036% at 130-04, S&P 500 futures are up 0.31% at 3006.25, Crude oil futures are down -0.95% at $58.08, Gold futures are down -0.17% at $1528.9, DXY is down -0.02% at 98.576, CAD/USD is down -0.04% at 0.7544.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.555% | 2 Year | 1.675% |
| 5 Year | 1.392% | 5 Year | 1.579% |
| 10 Year | 1.351% | 10 Year | 1.701% |
| 30 Year | 1.51% | 30 Year | 2.145% |
US Economic Data
| 09:00 AM | FHFA House Price Index MoM, Jul Survey: 0.30% Prior: 0.20% |
| S&P CoreLogic CS 20-City MoM SA, Jul Survey: 0.10% Prior: 0.04% | |
| S&P CoreLogic CS 20-City YoY NSA, Jul Survey: 2.10% Prior: 2.13% | |
| S&P CoreLogic CS 20-City NSA Index, Jul Survey: — Prior: 217.65 | |
| 10:00 AM | Richmond Fed Manufact. Index, Sep Survey: 1 Prior: 1 |
| Conf. Board Consumer Confidence, Sep Survey: 133.0 Prior: 135.1 |
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, Émile Bordeleau
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