Commentaires

Market Update Tsys slightly lower, 10Y 2.87%, earlier Turkish lira fell to new lows vs the USD. Strong volume in TY futures, ~880k or 4x recent avg. Core EGBS underperforming, Sep gilts fell to session lows after reports Turkey was set to release UK Pastor. US equity futures well off the lows, S&P unch after being down 16. US data calendar quiet, picks up Wednesday with Retail Sales. GOCs lower, reversing earlier gains as equity mkts recover. Provis closed wider Friday on risk off, spds opening unch. 

News headlines

Canada Overcomes Trump’s Metal Tariffs With Record Exports (Bloomberg) Canada’s merchandise trade deficit narrowed more than forecast as oil producers and aircraft makers led exports to a record high. Even after the U.S. imposed tariffs on steel and aluminum, Canada’s trade gap narrowed to C$626 million ($481 million) in June, down from C$2.7 billion a month earlier, Statistics Canada said Friday in Ottawa. Economists surveyed by Bloomberg predicted a deficit of C$2.3 billion. Exports rose 4.1 percent to C$50.7 billion, with energy shipments up 7.1 percent to the highest since 2014 and aircraft sales jumping by almost 45 percent. The return of several Canadian refineries to production after shutdowns also played a role in the 0.2 percent decline in imports as demand for foreign gasoline tumbled.

Robust Growth Pushes Canada’s Jobless Rate to Lowest Since 1970s (Bloomberg) Canada’s jobless rate returned to four-decade lows in July on stronger-than-expected employment gains, adding to evidence the nation’s economy continues to power ahead. The unemployment rate declined to 5.8 percent from 6 percent in June, matching the lowest level since the 1970s, Statistics Canada reported Friday from Ottawa. The economy added 54,100 jobs, marking a second straight month of exceptionally strong labor market gains.

Kushner’s Ties to Russia-Linked Group Began With Kissinger Lunch (Bloomberg) In March 2016, as the U.S. foreign policy establishment shunned presidential candidate Donald Trump, his son-in-law Jared Kushner was invited to lunch for a think tank urging detente with Russia and struggling for influence in Washington. The meeting at Manhattan’s Time Warner Center, which hasn’t been reported before, would prove significant for the Center for the National Interest and Kushner, who was still a little-known figure in the Trump campaign.

Stocks, EM Currencies Drop as Turkey Fever Spreads: Markets Wrap (Bloomberg) There were broad declines across equities on Monday and a sell-off in developing-nation currencies as the ongoing economic crisis in Turkey bled into global markets. The dollar and yen advanced. Futures on the Dow, S&P 500 and Nasdaq all pointed to a weaker open, while banks were among the biggest losers as the Stoxx Europe 600 Index fell. There’s concern the sector is heavily exposed to borrowers in Turkey, where the lira tumbled again alongside the country’s equities after President Recep Tayyip Erdogan maintained his defiance toward the U.S. and financial-market orthodoxy in speeches on Sunday. Central bank moves to boost liquidity provided little relief. The pain spread across emerging-market assets and the South African rand hit the lowest since June 2016.

Futures dip as Turkish currency crisis roils global markets (Reuters) Canada’s main stock index futures fell on Monday as ripple effects of the Turkish currency crisis continued to affect global markets, with investors seeking safety in government bonds and the dollar. September futures on the S&P/TSX index SXFc1 were down 0.13 percent at 7:15 a.m. ET. Canada’s main stock index fell on Friday. Dow Jones Industrial Average e-mini futures 1YMc1 were down 0.28 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were down 0.26 percent and Nasdaq 100 e-mini futures NQc1 were down 0.26 percent.

Trump threatens auto tariffs against Canada if trade talks fail (BNN) U.S. President Donald Trump said negotiations with Mexico on a new NAFTA are “coming along nicely,” while telling Canada it will have to wait to re-enter the talks to modernize the three-nation trade pact — hinting at his preference for bilateral negotiations. “Deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of or there will be no deal,” Trump tweeted late Friday, adding that incoming Mexican president Andres Manuel Lopez Obrador “has been an absolute gentleman.” Trump had harsher words for Canada, the other partner in the North American Free Trade Agreement. “Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!” he said.

Elon Musk’s tweet draws Tesla investor lawsuit over share price swing (BNN) Tesla Inc. () and Elon Musk were sued by an investor over wild share price swings following the chief executive officer’s Aug. 7 tweet saying he was considering taking the company private. The complaint alleges violations of U.S. securities law and was filed Friday as a class action in federal court in San Francisco. Musk set off a firestorm with the 53-character post on Twitter: “Am considering taking Tesla private at $420. Funding Secured.” The stock initially shot up 11 per cent to almost US$380. Then it fell back, losing about 7 per cent over two days, as doubts mounted about the feasibility of the going-private idea — and about the chief executive officer’s declaration that funding was already in place. He hasn’t supplied evidence that it was; nor has anyone else.

Overnight markets

Overview: US 10yr note futures are down -0.065% at 120-10, S&P 500 futures are down -0.09% at 2834.25, Crude oil futures are down -0.46% at $67.32, Gold futures are down -1.06% at $1206.1, DXY is up 0.06% at 96.418, CAD/USD is up 0.05% at 0.7605.

US Economic Data

Canadian Economic Data

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

Market Update Tsys higher, yields 2-4bps lower with the 10Y below 2.90% (2.89 -3.5bps) before CPI on safe haven flows after the Turkish lira spiked to a new low and global equity markets weaken on contagion fears, S&P futures -13, Nasdaq -44.  Core EGBs also higher in line with tsys, Sep bunds rising to a three-week high 163.15. GOCs higher before July employment data (17k exp vs 31.8k June, AHE 3.6% exp vs 3.5%). 

News headlines

Trump Stays Quiet While Saudi Arabia-Canada Tensions Rise (Bloomberg) The Trump administration is privately trying to coax Saudi Arabia to dial back hostilities with Canada even as the U.S. maintains a hands-off public approach to the escalating dispute between the two key allies, a senior U.S. official said. The U.S. is now trying to do behind-the-scenes damage control after being caught off guard by Saudi Arabia Crown Prince Mohammad bin Salman’s move this week to expel the Canadian ambassador, freeze new trade deals and cancel direct flights to Toronto on its state airline, according to the official, who spoke on condition of anonymity.

Ontario Goes Dark in Bond Market, Setting Up Slew of Fall Sales (Bloomberg) One of the world’s biggest non-sovereign borrowers has gone quiet in the debt market. The province of Ontario hasn’t sold bonds since June 1, a few days ahead of an election that ended 15 years of Liberal Party rule. This 70-day drought is almost a month longer than the pause that followed Ontario’s prior change in 2003, according to National Bank of Canada. The result will be a flood of sales from Ontario in the fall that may weigh on performance, said Ryan Goulding, a fixed-income analyst at Vancouver-based asset manager Leith Wheeler Investment Counsel Ltd.

Canada Sees Return to Nafta Talks as U.S.-Mexico Near Auto Deal (Bloomberg) Canada could soon be returning to the Nafta talks as the U.S. and Mexico approach agreement on a deal over cars, according to one of Canada’s top diplomats. The U.S. and Mexico, which have been in bilateral negotiations for about three weeks, appear to be “getting close” to agreement over auto manufacturing, David MacNaughton, Canada’s ambassador to the U.S., said in an interview.

Stocks Fall With Euro on Turkey Contagion Concern: Markets Wrap (Bloomberg) European stocks fell the most in almost a month and U.S. equity futures slipped as investors awaited a speech from Turkey’s president that they hope will address concerns about the country’s financial ills spilling over into the euro zone and emerging markets. The common currency sank, while the dollar advanced alongside Treasuries. The Stoxx Europe 600 Index slid, dragged down by banks, after a news report said the ECB was concerned about the exposure of European lenders to Turkey. Investors are now looking to President Recep Tayyip Erdogan to calm their nerves when he speaks Friday for the first time since the latest sell-off began. Contracts on the S&P 500, Dow and Nasdaq declined alongside shares in Asia. The euro dropped to the weakest level in a year, while the dollar rallied with Treasuries and core European bonds. Turkey’s lira sunk to a fresh record low amid the diplomatic spat with the U.S.

TSX futures lower as Turkey turmoil roils global markets (Reuters) Canada’s main stock index futures edged lower on Friday as global stock markets tumbled following a slump in Turkey’s currency due to the country’s deepening rift with the United States. Investors scurried for safer assets such as dollar, yen and U.S. government bonds. The dollar index .DXY, which measures the greenback’s strength against a group of six major currencies, touched its highest level since July 2017. September futures on the S&P/TSX index SXFc1 were down 0.51 percent at 7:15 a.m. ET. Employment data for July is due at 8:30 a.m. ET. Canada’s main stock index rose on Thursday.

Big credit card firms agree to cut fees they charge merchants (BNN) Major credit card companies have struck an agreement with the federal government to trim the fees they charge to merchants in a move Ottawa hopes will provide a boost to small businesses. Ottawa announced Thursday it has reached voluntary, five-year deals with Visa, MasterCard and American Express to cut fees by about 10 basis points. Finance Minister Bill Morneau, who unveiled the deal at an Ottawa grocery store, said he expects the agreements to help small and medium-sized businesses save a total of $250 million per year. “That’s a big difference for companies,” said Morneau, who billed the change as part of his department’s effort to listen to the concerns of Canadian business owners about staying competitive. 

Overnight markets

Overview: US 10yr note futures are up 0.287% at 120-02, S&P 500 futures are down -0.45% at 2841, Crude oil futures are up 0.73% at $67.3, Gold futures are up 0.11% at $1221.2, DXY is up 0.64% at 96.12, CAD/USD is up 0.27% at 0.7642.

US Economic Data

Canadian Economic Data

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

Market Update Tsys mixed before PPI, curve steeper10Y 2.95%narrow 3 tick range in TY futures on low volume (220k), little movement in EGBs as well with no major news overnite.  The US tsy auctions $18bln 30Y notes at 1:00ET while Fed Evans, a noted dove, speaks this aft as well.   GOCs in a narrow range over the past week, 10Y off the lows just under 2.36%. 2Y auction yest went well with the Nov20/2Y roll tighter (3/2.6) – which still appears 0.5 cheap to us. AT&T priced $2bln  tranche long 7 & 30Y@ 170.5, 277 – both deals over subscribed breaking 1bp tighter. 

News headlines

Saudis Play Hardball With Their Checkbook by Bashing Canada (Bloomberg) For Saudi Arabia, a new version of checkbook diplomacy is taking shape. The kingdom used to pursue a behind-the-scenes foreign policy, deploying its oil wealth as a carrot. Crown Prince Mohammed Bin Salman is ready to wield it like a stick. That’s the implication of his shock move to penalize Canada for criticizing Saudi treatment of women activists. With diplomatic ties and new business deals frozen, and the managers of Saudi wealth funds under orders to sell Canadian holdings, the measures were unexpected and sweeping.

Inflation Doubts Don’t Stop Global Central Banks Following Fed (Bloomberg)  Some of the world’s biggest central banks are taking baby steps on the path away from easy money despite uncertain inflation outlooks that suggest they need to tread more carefully. The Bank of England raised interest rates last week to the highest since 2009, even as Governor Mark Carney fretted about the “uncomfortably high” chance of a hard Brexit. The European Central Bank, while worried about trade protectionism, is ending bond purchases and preparing for a possible rate hike next year. The Bank of Japan is sticking to a massive stimulus program amid feeble inflation but giving bond yields more room to rise.

U.S. Oil Vanishing From China Tariffs Reveals American Clout (Bloomberg) The removal of U.S. crude from goods targeted by Chinese tariffs is a sign that America has become too big to ignore in the oil market. Less than two months after threatening to impose levies on imports of U.S. crude, the world’s biggest oil buyer has now spared the commodity. Only fuels such as diesel, gasoline, propane will be hit with duties on Aug. 23, according to China’s commerce ministry. That’s after the nation’s buyers, including top refiner Sinopec, began shunning American supplies to avoid the risk of tariffs.

Stocks Mixed Amid Trade Salvos; Dollar Advances: Markets Wrap (Bloomberg) Stocks were mixed Thursday, with European shares slipping and U.S. index futures flat, after a mostly positive session in Asia that saw Chinese equities shrug off the tariff to-and-fro between Beijing and Washington. The dollar gained, while crude oil hovered near a seven-week low. Energy majors led the decline in the Stoxx Europe 600 Index as futures on the S&P 500, Nasdaq and Dow Jones drifted before the release of jobs and price data later Thursday. Chinese and Hong Kong stocks firmed earlier as earnings reports offered a respite from the recent sell-off, while Japanese shares dropped. Treasuries were steady. Emerging-market currencies weakened for a second day, with Turkey’s lira and Russia’s ruble extending their slump as disputes with the U.S. deepened.

Saudi Arabia reassures Canada on oil supplies in row over jailed activists (Reuters) A row over human rights in Saudi Arabia will not have any impact on Saudi oil supplies to Canada, its energy minister said on Thursday, reassuring customers after Riyadh froze new trade with Canada and ruled out mediation efforts. Saudi Arabia, infuriated by Canada’s demand last week that jailed activists in the kingdom be released immediately, expelled the Canadian ambassador on Sunday, blocked imports of Canadian grain and ended state-backed educational and medical programs in Canada.

Rio Tinto considers float of Canadian iron ore business-sources (Reuters) Rio Tinto, the world’s second largest listed mining company, is exploring a public listing of its Iron Ore Company of Canada business, banking and industry sources said, as it focuses on boosting revenue from its flagship Australian assets. Iron ore, which accounts for most of Rio’s profit and is used in making steel, has provided healthy margins for years but the outlook is uncertain as major buyer China is expected increasingly to rely on recycling rather than importing raw material. 

Overnight markets

Overview: US 10yr note futures are up 0.078% at 119-19, S&P 500 futures are up 0.11% at 2858.5, Crude oil futures are down -0.01% at $66.93, Gold futures are up 0.27% at $1224.3, DXY is up 0.14% at 95.221, CAD/USD is up 0.1% at 0.7672.

US Economic Data

Canadian Economic Data

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