Market Update
US tsys trading weaker , yields 1.5 – 2 bps higher, 10Y 2.19 (+2bps), some profit taking after yesterday’s FTQ rally, above average volume in TY1 futures (388k). European stocks are higher, Euro Stoxx +0.40%, S&P futs +4.5, crude slightly lower 48.15. Attention shifts to Jackson Hole with Friday spechses from Yellen & Draghi. The US treasury auctions $14bln in 5Y TIPS at 1PM as well as announcing next week’s month end 2Y, 5Y & 7Y note auctions at 11:00AM. GOCs lower, outperforming tsys by ~0.5bps with the 10Y 1.89%. Provis finished 1bp wider yest despite strong demand for Quebec long reopening, this morning opening unch – Quebec 48s 81/80 , PQ/Ont 48 -1.4/-1.8.
News headlines
Dollar, Europe Stocks Firm as Jackson Hole Arrives: Markets Wrap (Bloomberg) Concerns about the Trump administration’s ability to enact its fiscal agenda were put on the back-burner in European trading, as focus turned instead to the start of the central bankers’ meeting in Jackson Hole. The dollar strengthened while stocks in Europe advanced.
Oil steady as storm heads into Gulf of Mexico (Reuters) Oil prices steadied on Thursday, holding on to most of their recent gains after another fall in U.S. crude inventories indicated a tighter market, and as a tropical storm headed towards oil producing facilities in the Gulf of Mexico.
UK shop sales slide unexpectedly in August, retailers’ mood downbeat: CBI (Reuters) British retail sales growth slowed in August at the fastest pace in more than a year as the squeeze on consumers from rising prices continued, according to a survey on Thursday.
Weak pound pushes UK household spending growth to slowest since 2014 (Reuters) British household spending grew at its weakest pace since late 2014 in the three months to June as the effect of a weaker pound since last year’s Brexit vote weighed on Britons’ spending power, official statistics showed on Thursday.
Can Oil Sands Pay Off at Just $50 a Barrel? (Bloomberg) The future is arriving—a few tons at a time—at Suncor Energy Inc.’s North Steepbank oil sands mine in Alberta, Canada. Human-operated excavators scrape away the top layers of soil to get to the hydrocarbon-rich tar sand beneath in much the same way they always have. But now they’re dumping that dirt into driverless trucks that use GPS systems and lasers to find their way through the massive mine.
Sears Sales Slide 11.5% (WSJ) Sears Holdings Corp.’s SHLD -5.09% brick-and-mortar stores continued to lose ground in a tough retail environment, despite the company’s cost-cutting efforts. Sales at stores open at least a year declined 11.5% in the fiscal second quarter as the company scaled back the number of pharmacies and electronic products in its stores. Kmart’s same-store sales fell 9.4%, compared with 3.3% over the same period and Sears same-store sales declined 12.3% compared with a 7% drop last year.
Overnight markets
Overview: US 10yr note futures are down -0.123% at 126-25, S&P 500 futures are up 0.28% at 2448.25, Crude oil futures are down -0.43% at $48.2, Gold futures are down -0.18% at $1292.4, DXY is up 0.09% at 93.235, CAD/USD is down -0.2% at 0.7982.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.265% | 2 Year | 1.326% |
| 5 Year | 1.563% | 5 Year | 1.765% |
| 10 Year | 1.896% | 10 Year | 2.187% |
| 30 Year | 2.302% | 30 Year | 2.759% |
US Economic Data
| 8:30 AM | Initial Jobless Claims, Aug 19, 234k, est. 238k (prior 232k) |
| Continuing Claims, Aug 12, 1954k, est. 1950k (prior 1953k, revised 1954k) | |
| 9:45 AM | Bloomberg Consumer Comfort Index, Aug 20, (prior 52.1) |
| 10:00 AM | MBA Mortgage Foreclosures, 2Q, (prior 1.39%) |
| Mortgage Delinquencies, 2Q, (prior 4.71%) | |
| Existing Home Sales, Jul, est. 5.55m (prior 5.52m) | |
| Existing Home Sales, m/m, Jul, est. 0.5% (prior -1.8%) | |
| 11:00 AM | Kansas City Fed Manufacturing Activity, Aug, est. 11 (prior 10) |
Canadian Economic Data
There is no major 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, David Leclair-Legault
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230