Market Update
US tsys higher in active session with the 10Y 1.52% (-2bps), heavy volume in TY futures (915k or 3x avg). Tsy yields off best levels reached during the Asian session on optimism for a trade deal after Trump said ‘China called’ and wants to return to the table. US equity futures tumbled out of the gate with S&P futures -30pts in Asia, only to turn positive on the trade news with S&P +14. Tone in core Euro bonds risk-on so far with bund yields ~1bp higher despite weaker August IFO sentiment data. GOCs lagging the move in tsys, Can/US 2-3bps wider – eco data released last week showed the domestic economy hanging in quite well despite trade uncertainty and lower crude prices. Q2 GDP, scheduled for this Friday, expected to rise 3.0% according to BB forecasts (from 2.5% previous survey) after 0.4% in Q1.
News headlines
U.S. Stock Futures Climb Amid Twists in Trade War: Markets Wrap (Bloomberg) U.S. equity-index futures turned higher along with shares in Europe after a down session in Asia on Monday as investors assessed the latest developments in the Sino-American trade war. The dollar strengthened.
TSX futures up on hopes of easing trade tensions (Reuters) Futures for Canada’s main stock index edged higher on Monday, bolstered by a rise in oil prices, as the United States and China sought to ease trade war tensions.
Oil Jumps After Trump Says China Wants to Restart Trade Talks (Bloomberg) Oil jumped after U.S. President Donald Trump said that China wanted to restart trade talks, potentially easing escalating tensions between the two countries.
Trump says China talks coming, Beijing calls for trade war resolution (Reuters) The United States and China sought to ease trade war tensions on Monday, with Beijing calling for calm and U.S. President Donald Trump predicting a deal after markets fell in response to new tariffs from both countries.
Trump-Abe trade deal helps U.S. farmers, staves off auto tariffs (BNN) The U.S. and Japan agreed in principle on a trade deal that would slash Tokyo’s tariffs on American beef, pork and other agricultural products, while delaying for now the threat of additional levies on Japanese auto exports to the U.S.
Japan denies it gave Trump too much in trade talks (Reuters) Japan’s top government spokesman denied on Monday that Tokyo made too many concessions in trade talks with the United States, saying the fact the two countries were able to reach a broad agreement was “very valuable.”
French, U.S. officials strike draft compromise on French digital tax (Reuters) French and U.S. negotiators have reached a compromise agreement on France’s digital tax, a levy which prompted U.S. President Donald Trump to threaten a separate tax on French wine imports, a source close to the negotiations said.
China aims to modernize industrial chains: top economic meeting (Reuters) China aims to modernize its industrial chains and boost self-reliance, state television said on Monday, citing a top-level economic meeting chaired by President Xi Jinping.
Market Overview: US 10yr note futures are up 0.048% at 131-01, S&P 500 futures are up 0.52% at 2870.25, Crude oil futures are up 1.05% at $54.74, Gold futures are up 0.2% at $1540.7, DXY is up 0.32% at 97.949, CAD/USD is up 0.13% at 0.7519.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.381% | 2 Year | 1.508% |
| 5 Year | 1.233% | 5 Year | 1.394% |
| 10 Year | 1.198% | 10 Year | 1.517% |
| 30 Year | 1.449% | 30 Year | 2.01% |
US Economic Data
| 08:30 AM | Chicago Fed Nat Activity Index, Jul Survey: 0.00 Prior: -0.02 |
| Durable Goods Orders, Jul P Survey: 1.20% Prior: 1.90% | |
| Durables Ex Transportation, Jul P Survey: 0.00% Prior: 1.00% | |
| Cap Goods Orders Nondef Ex Air, Jul P Survey: 0.00% Prior: 1.50% | |
| Cap Goods Ship Nondef Ex Air, Jul P Survey: 0.10% Prior: 0.30% | |
| 10:30 AM | Dallas Fed Manf. Activity, Aug Survey: -4.00 Prior: -6.30 |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Aug 23 Survey: — Prior: 57.30 |
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