Market Update
US tsys well bid, off the highs of the session on heavy volume (>1mln TY1) with the 10Y 1.51(-2.5bps), S&P futures +5, crude +1.0%. Treasury auctions resume this week with $40bln 2Y today, followed by $41bln 5Y Wed & $32bln 7Y Thurs. WI 2Y 1.52%, lowest auction yield since Sep 2017 and 30bps below last month’s level. Core Euro bonds wider vs tsys, German bund curve 2bps flatter led by longs – 2Y German Schatz auction saw weak demand (E3.95bln sold vs E5bln target). GOCs lagging tsys by 2-3bps, 10Y Can/US -31bps narrowest since Oct 2017.
News headlines
U.S. Stock Futures Edge Higher; Treasuries Advance: Markets Wrap (Bloomberg) U.S. equity futures nudged higher and Europe stocks climbed as investors picked through the ever-changing narrative on China trade. Treasuries advanced while the dollar dipped.
Canadian stock futures little changed over U.S.-China trade deal uncertainty (Reuters) Futures for Canada’s main stock index were little changed on Tuesday, as uncertainty over the U.S.-China trade dispute kept investors on edge and drove inflows into safer assets.
Oil Advances Amid Mixed Signals on U.S.-China Trade Dispute (Bloomberg) Oil rose after four days of losses as President Donald Trump gave mixed signals on resolving the trade dispute between the U.S. and China.
Canadian regulator summons RBC, TD Bank over malpractice charges (Reuters) The Ontario Securities Commission has issued a notice of hearing to Royal Bank of Canada (RY.TO) and Toronto-Dominion Bank (TD.TO) to settle charges of forex trading malpractices, the Canadian regulator said on Monday.
China says it hopes U.S. can create conditions for trade talks (Reuters) China’s foreign ministry reiterated on Tuesday that it had not heard of any recent telephone call between the United States and China on trade, and said it hopes Washington can stop its wrong actions and create conditions for talks.
New projects for battery material nickel need a price spur (Reuters) Rapidly rising use of nickel in the batteries that power electric vehicles over coming years means higher prices are needed to incentivize the development of new projects to boost supplies of the metal.
Three U.S. bond kings wield same strategy, get same result: lag their peers (Reuters) Three names dominate the U.S. world of bond investing – Jeffrey Gundlach, Dan Ivascyn and Scott Minerd. But funds run by these star investors are lagging their respective benchmarks this year.
Market Overview: US 10yr note futures are up 0.203% at 131-02, S&P 500 futures are up 0.12% at 2886.75, Crude oil futures are up 1.23% at $54.3, Gold futures are up 0.29% at $1541.6, DXY is down -0.18% at 97.909, CAD/USD is down -0.16% at 0.7557.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.387% | 2 Year | 1.526% |
| 5 Year | 1.232% | 5 Year | 1.397% |
| 10 Year | 1.203% | 10 Year | 1.505% |
| 30 Year | 1.456% | 30 Year | 1.993% |
US Economic Data
| 09:00 AM | House Price Purchase Index QoQ, 2Q Survey: 0.30% Prior: 1.10% |
| FHFA House Price Index MoM, Jun Survey: 0.20% Prior: 0.10% | |
| S&P CoreLogic CS 20-City MoM SA, Jun Survey: 0.10% Prior: 0.14% | |
| S&P CoreLogic CS 20-City YoY NSA, Jun Survey: 2.30% Prior: 2.39% | |
| S&P CoreLogic CS 20-City NSA Index, Jun Survey: 218.02 Prior: 216.94 | |
| S&P CoreLogic CS US HPI YoY NSA, Jun Survey: 3.30% Prior: 3.43% | |
| S&P CoreLogic CS US HPI NSA Index, Jun Survey: — Prior: 209.66 | |
| 10:00 AM | Richmond Fed Manufact. Index, Aug Survey: -4 Prior: -12 |
| Conf. Board Consumer Confidence, Aug Survey: 129.0 Prior: 135.7 |
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