25/08/2017

Market Update

US tsys trading weaker, US 10Y 2.20% after stronger July core Durable Goods Orders (0.5% vs 0.4%) and before Jackson Hole speeches from Yellen (10:00am) and Draghi (3:00pm).   Core European bond yields 1-2 bps lower, heavy selling in German 5Y futures around 6:00am, 14k contracts equivalent to E1.7bln 5Y bonds.  GOCs lower in line with tsys, 10Y  1.90% (+1.5bps), curve 0.5bps steeper 2s10s.  Provis finished unch yest  on light volume, expectations of new issuance weighing on GOCs mid morning. Quebec 48s 1bp wider this week , 81/80 from 80 reopening on Wed, Que/Ont 48 unch @ -1.2bps.

News headlines 

Stocks Rise as Dollar Slides Before Bankers Speak: Markets Wrap (Bloomberg) Stocks advanced as a commodity rally boosted shares of raw-material producers. The dollar slipped against most major peers and bonds declined before Janet Yellen and Mario Draghi speak in Jackson Hole.

Oil up as U.S. rigs and refineries brace for hurricane (Reuters) Oil prices rose on Friday as the U.S. petroleum industry braced for Hurricane Harvey, which may become the biggest storm to hit the U.S. mainland in more than a decade. Harvey became a category 2 storm as it crossed the Gulf of Mexico with winds of 105 mph (169 kph), 220 miles (355 km) off Corpus Christi, Texas, the National Hurricane Center said.

UK consumer morale edges up but gloom over finances deepens: YouGov/Cebr (Reuters) British consumer morale improved slightly in August but remained subdued overall as households became gloomier about their finances, a survey showed on Friday. The monthly consumer confidence index from pollster YouGov and consultancy Cebr rose to 107.6 from 107.2 in July, aided by an increase in its measures of job security and house prices.

Price slump, tight cash wreak havoc in Canada’s top housing market (Reuters) The sharp reversal in Toronto’s home prices has thrown Canada’s biggest property market into chaos, with scores of buyers suddenly short of money and desperate to get out of deals that looked good just a few months ago.

Citi Sees the Sun Rising in Japan Even as Inflation Stays Tepid (Bloomberg) The upbeat chorus for Japan’s economy is growing louder. Spurred by robust second quarter growth, Citigroup Inc. economists led by Willem Buiter have upgraded their 2017 growth forecast from 1.6 percent to 2 percent, “well above the potential growth rate of the Japanese economy.” That’s quite an outlook for an economy finally showing traction after decades of stagnation.

Canada ramps up deportations amid growing migrant influx (Reuters) As an influx of asylum seekers crossing from the United States strains Canada’s immigration system, the country is ramping up its deportation of migrants, government data shows. Deportations of Mexicans, who have flocked to Canada in growing numbers after a visa requirement was lifted in December, was already 66 percent higher in the first eight months of 2017 than the total from the previous year.

Overnight markets 

Overview: US 10yr note futures are down -0.025% at 126-21, S&P 500 futures are up 0.22% at 2446, Crude oil futures are up 0.46% at $47.65, Gold futures are down -0.08% at $1291, DXY is down -0.04% at 93.239, CAD/USD is down -0.08% at 0.7993.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.274% 2 Year 1.34%
5 Year 1.566% 5 Year 1.783%
10 Year 1.9% 10 Year 2.197%
30 Year 2.317% 30 Year 2.772%

US Economic Data 

8:30 AM Durable Goods Orders, Jul P, -6.8%, est. -6.0% (prior 6.4%)
Durables Ex Transportation, Jul P, 0.5%, est. 0.4% (prior 0.1%)
Cap Goods Orders Ex Air, Jul P, 0.4%, est. 0.4% (prior 0.0%)
Cap Goodds Ship Ex Air, Jul P, 1.0%, est. 0.2% (prior 0.1%, revised 0.6%)

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