Commentaires
07/09/2018
Market Update Tsy yields ~1bp higher across the curve, 10Y 2.88%, avg volume in TY futures (288k), narrow 4 tick overnight range before August nonfarm payrolls at 8:30ET (payrolls +190k exp, unemp rate 3.8%). Core EGBS lower, UK gilt futures recovering from earlier losses related to EU Barnier comments that the EU was open to certain ‘backstops’ on Brexit issue, the GBP spiked on the news and is higher vs the USD for a 3rd day. Bund yields higher, Italian BTPs continue to rally on budget plans. GOCs slightly lower in line with tsys before August employment (5k exp from 54k in July). Yesterday saw the GOC curve flatten 3bps and longs whipsawed in the face of BOC Wilkins afternoon comments – while 2s remained heavy there was dip buying in longs almost immediately after Wilkins hawkish headlines on the BOC dropping its ‘gradual approach’ language. Rumours of 10Y (QC) & long (Alta) provi supply didn’t happen also supported long end of the curve.
News headlines
Nafta Deal Unlikely This Week, Talks to Resume Friday (Bloomberg) A Nafta deal doesn’t look likely this week. Talks between the U.S. and Canada have seemed upbeat, but are not expected to lead to a deal this week, a Canadian government official said, speaking on condition of anonymity. The pace of meetings between U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland has slowed since last week, as both countries look to be squaring off. The Trump administration gave notice Aug. 31 of intent to sign a deal that could include Canada. Freeland has said there’s progress, but that no deal is done until it’s done. The officials will not be able to work through the weekend into the new week because Lighthizer is scheduled to meet his European counterpart in Brussels Monday.
Trump’s Loyalty Demands Met by ‘Treason’ Within His Inner Circle (Bloomberg) President Donald Trump is facing another set of revelations that call into question the loyalty of his inner circle, this time within the White House. Last month, two longtime business confidants struck cooperation deals with federal prosecutors, potentially trading information on Trump’s dealings for better treatment. Now, Watergate investigative reporter Bob Woodward’s book detailing a chaotic West Wing and former staffers actively deceiving and undermining Trump, coupled with an anonymous op-ed in the New York Times describing senior administration officials’ attempts to thwart the president, has further undermined his trust in his staff.
Bank of Canada Debated Whether to Accelerate Rate Hikes (Bloomberg) The Bank of Canada’s top officials debated whether to accelerate the pace of potential interest rate hikes, before finally choosing to stick to their current “gradual” path. In a speech Thursday outlining some of the deliberations from yesterday’s rate decision, Senior Deputy Governor Carolyn Wilkins said the issue came up in the governing council’s discussions because Canada’s economy is running near capacity and is at the stage of the business cycle where the focus turns to combating price increases.
Stocks Decline on Tariff Suspense; Dollar Steady: Markets Wrap (Bloomberg) S&P 500 Index futures fell along with European shares as investors awaited the latest move in the U.S.-China trade war, as well as key payroll data from the world’s biggest economy later Friday. Emerging-market equities snapped seven days of declines while a gauge of currencies also rose. U.S. equity futures pointed to a softer open as the Stoxx Europe 600 Index slipped, heading for its worst week since March, following a mostly negative session in Asia. Equities fell in Japan, South Korea and Australia, while those in China posted gains. Technology shares lagged behind, following their U.S. counterparts lower amid concern about the durability of chip demand.
China to increase export tax rebates on 397 products (Reuters) China said on Friday it will increase export tax rebates for 397 items ranging from some steel products to electronic ones, in a bid to boost prospects for shipments amid its trade war with the United States. The move comes as word is widely awaited on whether U.S. President Donald Trump will impose tariffs on another $200 billion of imports from China. A public consultation period in Washington on the proposal has just ended.
Short seller Andrew Left suing Musk, Tesla for inflating stock price (BNN) Citron Research founder Andrew Left, an activist short-seller known among other things for calling beleaguered drug company Valeant a “pharmaceutical Enron,” is suing Tesla Inc. () and Chairman Elon Musk for inflating the company’s stock price. In his lawsuit, Left seeks to represent a class of investors who traded Tesla shares from Aug. 7 to Aug. 17. The suit cites Musk’s “long-standing public feud with short-sellers,” claiming he manipulated the price of Tesla securities to hurt such investors — and in so doing damaged all buyers of the company’s shares by issuing false and misleading information.
Delta jet-engine failure at 18,000 feet draws U.S. safety probe (BNN) U.S. safety regulators are investigating an engine failure on a Delta Air Lines Inc. () jet that forced pilots to shut down the turbine and return to Atlanta shortly after takeoff. The accident occurred Wednesday on a Boeing Co. () 757-200 bound for Orlando, Florida, the National Transportation Safety Board said Thursday on Twitter. Delta Flight 1418, which had 121 passengers and six crew members, landed safely and there were no injuries. The engine failure occurred at about 18,000 feet, according to the Federal Aviation Administration.
Overnight markets
Overview: US 10yr note futures are down -0.065% at 120-03, S&P 500 futures are down -0.17% at 2874, Crude oil futures are up 0.06% at $67.81, Gold futures are up 0.2% at $1206.7, DXY is down -0.04% at 94.987, CAD/USD is down -0.2% at 0.7624.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.086% | 2 Year | 2.645% |
| 5 Year | 2.183% | 5 Year | 2.757% |
| 10 Year | 2.25% | 10 Year | 2.888% |
| 30 Year | 2.263% | 30 Year | 3.067% |
US Economic Data
| 8:30 AM | Change in Nonfarm Payrolls, Aug est 190k (157k prior) |
| Change in Private Payrolls, Aug est 194k (170k prior) | |
| Change in Manufact Payrolls, Aug est 23k (37k prior) | |
| Unemployment Rate, Aug est 3.8% (3.9% prior) | |
| Average Hourly Earnings MoM, Aug est 0.2% (0.3% prior) | |
| Average Hourly Earnings YoY, Aug est 2.7% (2.7% prior) | |
| Average Weekly Hours All Employees, Aug est 34.5 (34.5 prior) | |
| Labor Force Participation Rate, Aug (62.9% prior) |
Canadian Economic Data
| 8:30 AM | Net Change in Employment, Aug est 5.0k (54.1k prior) |
| Unemployment Rate, Aug est 5.9% (5.8% prior) | |
| Hourly Earnings Permanent Empl YoY, Aug est 3.0% (3.0% prior) | |
| Full Time Employment Change, Aug est 35.0k (-28.0k prior) | |
| Part Time Employment Change, Aug est -30.0k (82.0k prior) | |
| Participation Rate, Aug est 65.5 (65.4 prior) | |
| 10:00 AM | Ivey Purchasing Managers Index SA, Aug (61.8 prior) |
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, Hugues Savard
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
06/09/2018
Market Update Tsys trading higher, 10Y 2.895%, long end lagging tsy curve 1bps steeper on light volume in TY futures overnite (245k), prices moving higher after weaker August ADP (163k vs 200k exp) ahead of non-farm payrolls tomorrow (195k est). Equities firmer (S&P fut +1), crude slightly higher. GOCs slightly higher, lagging the rally in tsys post ADP – provi supply rumoured (Quebec 10Y, long Alberta)
News headlines
Canada’s Dairy Farmers Could Be Trudeau’s Nafta Bargaining Chip (Bloomberg) Henry Holtmann has seen this before – Canada carving off access to its dairy market as a bargaining chip, and using it in trade talks. Now it could happen again. More than 2,500 kilometers (1,500 miles) from Washington, the third-generation Canadian dairy farmer is closely watching North American Free Trade Agreement talks, where U.S. President Donald Trump has taken aim repeatedly at his sector. Canada could once again barter away a piece of its restricted – and lucrative – dairy market, over outcry from farmers like Holtmann.
Things Are Not Going to Plan in Trump’s U.S. Trade Deficit Wars (Bloomberg) The numbers are not looking good for a president who has made reducing the U.S. trade deficit one of his main economic goals. Worse still, signs are emerging that President Donald Trump’s trade wars are starting to hit economic growth, not just at home but around the world. New data out Wednesday showed the U.S. trade deficit in July widening at its fastest rate since 2015 as monthly deficits with China and the European Union both hit new records. In the year so far, the U.S.’s overall goods and services deficit is up by $22 billion, or 7 percent, versus the same period last year.
Trump Says He May Sign New South Korea Trade Deal This Month (Bloomberg) President Donald Trump said he has finished negotiating a new trade deal with South Korea and may sign it at the United Nations General Assembly that starts this month. “The deal is done,” Trump told reporters at the White House on Wednesday. “It’s been done with South Korea for a long time. It’s been done for about two months. We’ll do a ceremonial signing over the next very short period of time.”
Stocks Struggle for Foothold as EM Fears Linger: Markets Wrap (Bloomberg) U.S. stock futures and European equities swung between gains and losses as they grappled for direction amidst turmoil in emerging markets. The yen climbed and the dollar was steady. Futures on the Dow, S&P 500 and Nasdaq pointed to a steady open, while the Stoxx Europe 600 Index edged lower after two days of losses. Earlier, the MSCI Asia Pacific Index was down for a sixth straight session, as Japan underperformed in the wake of a powerful earthquake. The Turkish lira and South African rand helped lead a recovery in emerging market currencies, while the MSCI Emerging Markets Index of stocks headed for a seventh consecutive fall. Ten-year Treasuries were little changed and European bonds were mixed.
NAFTA talks make progress; U.S., Canadian officials to work into night (Reuters) The United States and Canada have made progress in talks to revise the North American Free Trade Agreement, and officials from the two sides will work together into the night to flesh out areas for further discussion, Canadian Foreign Minister Chrystia Freeland said on Wednesday. Freeland sounded upbeat as she emerged from a day of talks with top U.S. trade negotiator Robert Lighthizer, although she cautioned that no trade deal was done until the last issue was nailed down.
Bank of Canada leaves rates unchanged; markets mull October hike (Reuters) The Bank of Canada held interest rates steady on Wednesday as expected and said more hikes would be needed to keep inflation on target, boosting speculation it could tighten monetary policy next month. The overnight interest rate remains at 1.50 percent. The central bank, which maintains a 2 percent inflation target, has raised rates four times since July 2017 amid a strengthening economy.
Metro Vancouver home prices edge lower for 2 straight months (BNN) The Real Estate Board of Greater Vancouver says prices for detached homes, townhouses and condos have fallen for two consecutive months in Metro Vancouver. The board says the benchmark price for all types of properties is currently $1,083,400 — up 4.1 per cent compared to August 2017, but down 1.9 per cent since May 2018. Detached home prices fell 2.8 per cent since May to $1,561,000, which is also down 3.1 per cent compared to the previous August. Attached home prices fell 0.8 per cent to $846,100 since May, but rose 7.9 per cent compared to August 2017.
Couche-Tard Q1 profit surges 25% despite lag in Esso loyalty program (BNN) Alimentation Couche-Tard Inc. () posted strong earnings and revenue growth from acquisitions in the first quarter of its fiscal year, even though a gap in the switch to the PC Optimum loyalty program from Aeroplan hurt sales at its Esso branded convenience store locations. The Quebec-based retailer said its net income attributable to shareholders surged 25 per cent to US$455.5 million for the period ended July 22. That was up from US$364.7 million a year earlier.
Overnight markets
Overview: US 10yr note futures are down 0% at 119-31, S&P 500 futures are up 0.11% at 2891.5, Crude oil futures are up 0.15% at $68.82, Gold futures are up 0.88% at $1211.9, DXY is down -0.11% at 95.079, CAD/USD is down 0% at 0.7588.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.05% | 2 Year | 2.649% |
| 5 Year | 2.163% | 5 Year | 2.769% |
| 10 Year | 2.239% | 10 Year | 2.906% |
| 30 Year | 2.262% | 30 Year | 3.085% |
US Economic Data
| 7:30 AM | Challenger Job Cuts YoY, Aug 13.7% (-4.2% prior) |
| 8:15 AM | ADP Employment Change, Aug 163k est 200k (219k prior) |
| 8:30 AM | Nonfarm Productivity, 2Q est 3.0% (2.9% prior) |
| Unit Labor Costs, 2Q est -0.9% (-0.9% prior) | |
| Initial Jobless Claims, Sep 1st est 213k (213k prior) | |
| Continuing Claims, Aug 25th est 1720k (1708k prior) | |
| 9:45 AM | Bloomberg Consumer Comfort, Sep 2nd (58.3 prior) |
| Markit US Services PMI, Aug est 55.2 (55.2 prior) | |
| Markit US Composite PMI, Aug (55.0 prior) | |
| 10:00 AM | ISM Non-Manufacturing Index, Aug est 56.8 (55.7 prior) |
| Factory Orders, Jul est -0.6% (0.7% prior) | |
| Factory Orders Ex Trans, Jul (0.4% prior) | |
| Durable Goods Orders, Jul est -1.7% (-1.7% prior) | |
| Durables Ex Transportation, Jul (0.2% prior) | |
| Cap Goods Orders Nondef Ex Air, Jul (1.4% prior) | |
| Cap Goods Ship Nondef Ex Air, Jul (0.9% prior) |
Canadian Economic Data
| 8:30 AM | Building Permits MoM, Jul est 1.0% (-2.3% prior) |
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, Hugues Savard
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
05/09/2018
Market Update Tsys trading higher, yields 0.5-1.5bps lower, 10Y 2.88%, prices recovering from yesterday’s selloff which saw the 10Y rise above 2.90% for the first time since August 10th. Emerging mkt extending weakness – Asian stock markets all lower – Hang Seng -2.6%, Jakarta comp -3.8% while USD strength continues DXY +0.24. Risk off with $200bln in US tariffs on Chinese goods expected to go into effect by the end of the week trade Crude lower after rising to 2014 highs yest 71.50 on Iran supply squeeze,oil analyst on CNBC yest saying sanctions could push crude back above $100. GOCs slightly lower, 1bp wider vs tsys, curve 1bp flatter before BOC decision (no change expected, no press conf). Yesterday looked like some short covering esp at the short end pre BOC, possibly a rethinking of odds for an October hike in light of the lack of progress on NAFTA.
News headlines
Nafta Talks Restart Under Pressure from Trump and Congress (Bloomberg) Talks to revamp the North American Free Trade Agreement are set to resume as U.S. and Canadian negotiators push to strike a deal amid President Donald Trump’s threats to walk away. Canadian Foreign Affairs Minister Chrystia Freeland is scheduled to meet U.S. Trade Representative Robert Lighthizer in Washington Wednesday after a series of back-to-back meetings last week failed to yield an agreement. They were rushing to bridge their differences by the end of August so Canada could join a preliminary pact the U.S. had struck with Mexico just days earlier.
As Trump Weighs Tariffs, China’s Industrial Ambitions Loom Large (Bloomberg) Conflict over China’s industrial policies is at the center of a trade war that’s set to escalate should President Donald Trump go ahead with planned tariffs on another $200 billion of Chinese goods as soon as this week. The core of those industrial policies is the Made in China 2025 plan to dominate industries from robotics to new-energy vehicles and aerospace. A key element of that blueprint is an unofficial document that’s slipped largely under the radar: The Made in China 2025 Major Technical Roadmap, better known as the Green Book after the color of its original cover.
Democrats Poised to Grill Kavanaugh at Supreme Court Hearing (Bloomberg) Democrats spent the first day of Brett Kavanaugh’s U.S. Supreme Court confirmation hearings criticizing Republicans. Now they will turn to the nominee himself. Kavanaugh closed out a day of rancor among senators Tuesday by promising in his opening remarks to be a « neutral and impartial arbiter who favors no litigant or policy. » He said the court « must never be viewed as a partisan institution. »
Stocks Retreat Amid EM Turmoil; Dollar Advances: Markets Wrap (Bloomberg) U.S. stock futures followed European shares lower Wednesday after a broad sell-off in Asia, as enduring pressure in emerging markets intensified concerns of contagion. With investors seeing no let-up in trade tensions, the dollar strengthened for a fifth session and commodities slipped, led by oil. Futures on the S&P 500 pointed to losses after the Stoxx Europe 600 Index dropped to its lowest since April before paring some of the decline. A day after developing-market currencies tumbled, it was the stock market’s turn in the hot seat. Shares slid from Japan to Australia and were bruised most in Indonesia, where the nation’s benchmark lost almost 4 percent. The 10-year Treasury yield eased back to 2.89 percent, while the dollar strengthened. At the same time, an emerging-market currency gauge fell to a fresh one-year low, led for a second day by South Africa’s rand.
Canada PM indicates he will not bend on key NAFTA demands at talks (Reuters) Canadian Prime Minister Justin Trudeau indicated on Tuesday that Canada would not compromise on key demands at high-level talks this week with the United States to update the North American Free Trade Agreement. Senior officials from both sides are due to meet in Washington on Wednesday in a bid to settle major differences amid pressure from Washington for a quick settlement. “There are a number of things we absolutely must see in a renegotiated NAFTA,” Trudeau told reporters in the Pacific province of British Columbia.
Canadian dollar to rally, say strategists betting on trade deal (Reuters) Canada’s dollar is likely to rally over the coming months, according to foreign exchange strategists in a Reuters poll, who forecast that trade uncertainty will fade and the Bank of Canada will continue to raise interest rates. The latest poll of more than 35 market strategists taken Sept 1-4 predicted the Canadian dollar would rally to C$1.30 against the U.S. dollar, or about 77 U.S. cents, in three months, from nearly a seven-week low of C$1.32 on Tuesday.
Canadians feeling weight of debt, despite better financial position (BNN) Many Canadians are feeling the debt crunch, despite two-thirds of the country being in a better financial position than previous years, according to a new study released Wednesday. The Canadian Payroll Association found that 66 per cent of Canadians surveyed said they are in a better financial position than they were one year ago, according to the study. However, 40 per cent of respondents said they feel overwhelmed by their current debt levels, the study found. “We would have hoped to see in the survey results that Canadians would do more to alleviate their debt and take control of their financial situation in strong economic times,” said Peter Tzanetakis, president of the Canadian Payroll Association, in a release.
Amazon joins Apple in climb to US$1 trillion market value (BNN) Amazon.com Inc. () shares rose as much as 1.9 per cent, pushing the company briefly beyond a market value of US$1 trillion, a milestone Apple Inc. () reached last month. It’s an historic accomplishment for Chief Executive Officer Jeff Bezos, who founded the company in his Seattle garage in 1994 as a small online book seller. Now Bezos is the world’s wealthiest person, running a diversified global enterprise with more than US$200 billion in annual sales and more than 575,000 employees.
Overnight markets
Overview: US 10yr note futures are up 0.104% at 120-02, S&P 500 futures are down -0.23% at 2891.5, Crude oil futures are down -1.13% at $69.08, Gold futures are up 0.03% at $1199.4, DXY is down 0% at 95.437, CAD/USD is down -0.13% at 0.7592.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.064% | 2 Year | 2.645% |
| 5 Year | 2.167% | 5 Year | 2.758% |
| 10 Year | 2.238% | 10 Year | 2.888% |
| 30 Year | 2.259% | 30 Year | 3.057% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Aug 31st -0.1% (-1.7% prior) |
| 8:30 AM | Trade Balance, Jul -50.1b est -50.2b (-46.3b prior) |
Canadian Economic Data
| 8:30 AM | Int’l Merchandise Trade, Jul -0.11b est -1.00b (-0.63b prior) |
| Labor Productivity QoQ, 2Q 0.7% est 0.5% (-0.3% prior) | |
| 10:00 AM | Bank of Canada Rate Decision, Sep 5th est 1.50% (1.50% prior) |
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, Hugues Savard
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