- US tsys opening slightly lower, US 10Y 1.56% recouping earlier losses as stocks move lower, US stock futures fall into the red. Core Euro bonds also lower led by UK gilts. German bonds lower, steeper weighed by better than exp IFO index as well as long index link gilt deal. Main events for the week revolve around central banks – FOMC on Wed, BOJ Friday. GOCs opening unch, provis unch after closing 3bps tighter last week. QC 48s reopened last week at 102 now 101/100.5 with Q,Ont rumoured as likely supply candidates this week.
- European Stocks Climb on German Confidence as Gold, Bonds Fall (Bloomberg) Equity markets got a boost from a report showing Germany’s business climate remained robust after Britain voted to leave the European Union. Bonds fell with gold before central bank meetings in the U.S. and Japan this week. The Stoxx Europe 600 Index rose for the first time in three days after business confidence in the region’s largest economy proved more resilient in July than economists predicted
- Yellen Still Waiting for Overwhelming Evidence to Warrant Hike (Bloomberg) For Federal Reserve officials, getting better never seems to rise to good enough. Since the policy-setting Federal Open Market Committee last gathered six weeks ago, economic reports have shown one example of U.S. resilience after another following a slow first quarter. When the monetary policy panel meets on Tuesday and Wednesday, a majority of investors expect them to do what they have done at every meeting this year: nothing.
- Oil Trades Near Two-Month Low as Drilling Increases Amid Surplus (Bloomberg) Oil traded near the lowest close in more than two months after U.S. producers increased drilling for a fourth week even as the market contended with abundant supplies. Futures fell 0.7 percent in New York after slipping 3.8 percent last week. U.S. oil explorers expanded the number of rigs in action by 14 to 371 for the longest run of gains since August, Baker Hughes Inc. said Friday. Hedge funds and other money managers added the most bets in a year on lower West Texas Intermediate prices, according to U.S. Commodity Futures Trading Commission data.
- Yahoo Agrees to Sell Web Businesses to Verizon for $4.8 Billion (Bloomberg) Yahoo! Inc. agreed to sell its main web businesses to Verizon Communications Inc. for $4.8 billion, ending a two-decade run as an independent company that took it from Stanford University startup at the dawn of the internet age to also-ran behind nimbler online rivals such as Google and Facebook Inc.
- G20 will use ‘all policy tools’ to lift growth as Brexit weighs (Reuters) The world’s biggest economies will work to support global growth and better share the benefits of trade, policymakers said on Sunday after a meeting dominated by the impact of Britain’s exit from Europe and fears of rising protectionism. Philip Hammond, Britain’s new finance minister, said the uncertainty about Brexit would begin to abate once Britain laid out a vision for a future relationship with Europe, which could become clearer later this year.
- Australia second-quarter inflation to make or break case for rate cut (Reuters) Australian inflation likely braked to all-time lows in the second quarter, if analyst forecasts prove right, cementing the case for another cut in interest rates as early as next month. When underlying inflation slowed surprisingly sharply to a record low of 1.5 percent in the first quarter, the Reserve Bank of Australia (RBA) responded almost immediately by trimming the cash rate a quarter point to 1.75 percent. ECONAU
- South Korea second-quarter GDP growth expected to top first-quarter, but only just (Reuters) South Korea’s economic growth was expected to show little improvement over April-June versus the first quarter in sequential terms, a Reuters poll found on Monday, as weak exports and capital investment continue to undermine growth. The economy was expected to expand by 0.7 percent in the second quarter from the first on a seasonally adjusted basis, according to the survey, accelerating slightly from 0.5 percent growth in January-March.
- Overview: US 10yr note futures are down 0% at 132-4, S&P 500 futures are down -0.01% at 2167.25, Crude oil futures are down -1.7% at $43.44, Gold futures are down -0.56% at $1324, DXY is down -0.03% at 97.442.
US Economic Data
- 10:30 AM Dallas Fed Manufacturing Index, July, est. -10.0 (prior -18.3)
Canadian Economic Data
- 10:00 AM Bloomberg Nanos Confidence, July 22 (prior 57.3)
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