21/07/2015

Market update

US tsys trading lower, US 10Y 2.40% (+2bps), tsy 5/30 curve steeper after reaching flattest lvls since mid June yest. Stocks higher, China (Shanghai comp) up for 4th day, gold higher as well first time in a week, recouping fraction of yest steep losses. Quiet day in terms of data both in Can & US so flows likely dominated by US corp deal pricing after yest saw $14.5bln in new issuance including $10.5bln UnitedHealth (A3/A+). Core Euro bonds trading lower led by UK gilts on long Gilt supply. In Canada, GOCs are lower , curve steeper – front end solid, BA futures pricing in ~50% odds of another 25bp cut by year end. BOC auctions $3.3bln in reopened Sep 20s with the roll 15.3/15.1

International news

• Gold firmer as dollar rally (FT) Gold is recovering some ground after its swift retreat, while European and Asian stocks are mixed as futures show Wall Street flirting with record levels.

• Treasury Buyers Foreseeing September Rates Liftoff Flatten Curve (Bloomberg) Treasury investors are starting to believe in a September interest-rate increase again.Futures show a 42 percent chance the Federal Reserve will raise borrowing costs during that month, up from 35 percent odds a week ago, as Greece’s bailout agreement clears one of the obstacles to higher rates.

• How China Market Thinned as It Plunged (WSJ) China may have the world’s second-biggest stock markets after the U.S., but at one point during a roller-coaster ride for investors this month only 93 of 2,879 listed companies were freely tradable—about the same number as trade in Oman.
Overnight markets

• Overview: IG24 5Y 66.5/66.9 (+0.70), US 10yr note futures are down -0.12% at 125-23+, S&P 500 futures are down -0.08% at 2120.25, Crude oil futures are up +0.18% at 50.24, Gold futures are down -0.29% at $1103.60, DXY is down -0.13% at 97.874.
•US BANK CDS (5yr): BAC 67/71 (+0), GS 84/88 (+0), MS 76/80 (+0), C 75/79 (+0), JPM 67/71 (+0), WFC 50/54 (+0)

US Economic Data

• Revisions to industrial production and capacity utilization.

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.

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