Market update

US tsys are mixed after 2Q GDP was revised higher (3.7% vs 2.3%), curve ~2bps flatter, US 10Y 2.19 (+1bp).  Reports of China liquidating tsys to support yuan  as well as comments from BOJ Kuroda on inflation pressured tsys overnite. The pipeline of IG corporate issuance is building after issuance ground to a halt due to equity volatility this week. Could be as much as $100bln in Sept according to MNI, should conditions stabilize further. The US auctions $29bln in 7Y notes after lacklustre 2 & 5Y auctions, with the belly of the tsy curve ~3 bps cheaper than at this pt yest which should support the auction. In Canada, GOCs are lower led by the 5Y for a change with 5/10 ~2bps flatter. Provis opening ~1bp tighter, long Onts trading up at 99 earlier, Ont 25s @ 87.5 so the 45/25 bs is ~1bp wider at 11.9/11.6.

News headlines

Overnight markets

  •  Overview: IG24 5Y 79.4/79.9 (-2.6), US 10yr note futures are down -0.21% at 127-21+, S&P 500 futures are up +1.24% at 1962.0, Crude oil futures are up +3.83% at 40.08, Gold futures are down -0.32% at $1121.0, DXY is up +0.69% at 95.759.
  • US BANK CDS (5yr): BAC 78/83 (-3), GS 98/103 (-1), MS 90/95 (-2), C 90/95 (-3), JPM 79/84 (-2), WFC 58/63 (-1)

 US Economic Data

  • GDP annualized QoQ grew 3.7% in 2Q 2015 higher than previously reported 2.3% increase.
  • Personal consumption came in at 3.1% for 2Q 2015 vs 2.9% for previous release.
  • GDP price index and Core PCE QoQ for 2Q 2015 were 2.1% and 1.8% 0.1% for GDP price index and unchanged from previous release.
  • Initial jobless claims came in at 271K  for the week ending August 22, lower than expected (274K) and prior week (277K).
  • Continuing claims increased to 2269K from 2256K and higher than expected (2248K).
  • Pending home sales are forecast at 1.0% MoM (8.3% YoY) in July versus June -1.8% MoM (11.1% YoY).
  • Kansas City Fed manufacturing index is forecast at -4 in August higher than July level (-7).

Canadian Economic Data

  • There is no major economic data 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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230