Commentaires

Market Update Tsys higher on ‘risk off’ as Turkish lira falls for the first day in four, US Tsy sec Mnuchin threatening further sanctions on Turkey. Also reports Germany/Turkey talked about IMF rescue. US equity futures lower, S&P -7, Nasdaq – 27. GOCs higher before July CPI -consensus calling for a 2.5% increase. Provis trading down to start, Ont 28s @ 68, Ont 48s @82. Ontario back in the mkt yesterday after an extended hiatus selling $1bln 10Y bonds @68 and $2.65bln 5Y Aug 21 2023 FRN @ 3M CDOR +5bps. Both deals went well, 10s closed 67/66 while the FRNs were upsized from $2bln, and @ 3M CDOR +5 looked expensive vs. Ont 5Y fixed ASW. Bell Canada issued $750mln in new 10Y @ 155.5 (vs 158 init guid),closed 154/151. 

News headlines

Canada annual inflation rate rises to 3 percent in July (Reuters) Canada’s annual inflation rate in July rose to 3.0 percent as prices in all eight major components increased year-over-year, Statistics Canada said on Friday.

Trump Pushes China for Better Deal With Trade Talks Set to Resume (Bloomberg) President Donald Trump prodded China to offer more at the bargaining table as the two countries prepared for their first major negotiation in more than two months in an effort to head off an all-out trade war.

Turkey’s lira weakens more than 6 percent on threat of more U.S. sanctions (Reuters) Turkey’s battered lira weakened more than 6 percent against the dollar on Friday, after a U.S. warning that Ankara should expect more economic sanctions unless it hands over detained American evangelical pastor Andrew Brunson. Turkish banks moved to ease access to credit for companies as the prospect of further U.S. sanctions and a review of the nation’s debt sent new convulsions through financial markets. 

Trump asks SEC to mull half-year corporate filings vs quarterly (Reuters) U.S. President Donald Trump said on Friday he has asked the U.S. Securities and Exchange Commission to study the impact of allowing companies to file reports with the financial regulator every six months instead of every quarter.

Russian oil industry would weather U.S. ‘bill from hell’ (Reuters) Stiff new U.S. sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology.

Greece set to exit bailout, still faces daunting challenges. (Reuters) Greece exits the last of its three bailouts on Aug. 20 and hopes to be able to borrow again in international markets after a nearly nine-year debt crisis that shrank the economy by a quarter and forced it to implement painful austerity measures. 

Investors flee risk as bear markets multiply: BAML (Reuters) Investors pulled billions from equities this week, shifting into bonds and high dividend-yielding sectors as Turkey’s currency crisis sparked a global selloff and emerging markets entered bear territory, an analysis of fund flows showed on Friday. 

Overnight markets

Overview: US 10yr note futures are up 0.078% at 120-12, S&P 500 futures are down -0.24% at 2838, Crude oil futures are up 0.82% at $66, Gold futures are up 0.08% at $1184.9, DXY is down -0.26% at 96.392, CAD/USD is down -0.64% at 0.7649.

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 US tsys reversing earlier losses, near upper end of overnite range after weaker July Housing Starts, big miss on Aug Phili Fed (11.9 vs 22)- US 10Y 2.865%. US equity futures positive – Walmart +10% pre-mkt after Q2 eps beat ($1.29 vs $1.22), same store sales +4.5% vs 2.4% exp.  GOCs higher in line with tsys after ADP, Man. Sales data , GOC curve 1bp flatter 2s10s, 10s30s unch @ 1.8bps. Core EGBs also lower, gilts weighed by better than exp UK retail sales (0.9% vs 0.0%). Credit 4-5bps wider wk/wk, Ontario 28s trading down 0.5bps on expectatiosn of supply. 

News headlines

One Year Later Nafta Lives On, Resisting Trump’s Trade Wrath (Bloomberg) President Donald Trump has made no secret that he wanted the North American Free Trade Agreement gone. A year of on-again-off-again negotiations without a clear view of an endgame has demonstrated the pact’s staying power. The survival of Nafta was hardly a given exactly a year ago, when negotiators from the U.S., Canada and Mexico gathered at a hotel in Washington. Their task was to start hammering out a fast update to the 24-year-old pact, which governs $1.2 trillion in trade. 

China and U.S. to Resume Low-Level Talks in Bid to Resolve Trade War (Bloomberg) China will dispatch Vice Commerce Minister Wang Shouwen to the U.S. for low-level trade talks in late August, the first official exchanges since earlier negotiations broke down two months ago. The Chinese delegation led by Wang will meet with an American group led by David Malpass, under secretary for international affairs at the Department of the Treasury, at the invitation of the U.S., China’s Ministry of Commerce said in a statement on its website on Thursday.

Erdogan Moves to Shore Up Alliances as U.S. Standoff Deepens (Bloomberg) President Recep Tayyip Erdogan moved to shore up alliances in Europe and the Middle East, easing pressure on the battered lira, as the standoff between Turkey and the U.S. deepened. Efforts to rally support and bolster domestic markets include a call between Turkish Finance Minister Berat Albayrak and international investors. Erdogan was set to speak with French President Emmanuel Macron on Thursday, a day after talks with German Chancellor Angela Merkel and a $15 billion pledge of support from Qatar.

U.S. Stock Futures Rise, Dollar Dips on Trade Hope: Markets Wrap (Bloomberg) U.S. equity futures climbed with European stocks and the dollar fell on renewed hopes for an easing of global-trade tensions. The yuan jumped and Treasuries dipped. Futures on the S&P 500, Dow and Nasdaq indexes extended gains after Walmart beat second-quarter sales and earnings estimates, following the Stoxx Europe 600 Index higher. The greenback, which has seen recent strength on its role as a haven, fell for the first time in six days. Stocks stayed lower in most Asian markets in the wake of disappointing earnings from tech giant Tencent Holding, though pared declines after China said its vice commerce minister will visit the U.S. for talks in late August.

Futures rise as U.S.-China trade talks expected to resume (Reuters) Futures for Canada’s main stock index rose on Thursday after China said it would hold trade talks with the United States later this month, while the Turkish lira continued to recover from its fall last week. September futures on the S&P/TSX index SXFc1 were up 0.55 percent at 7:15 a.m. ET. Manufacturing sales data for June is due at 8:30 a.m. ET. Canada’s main stock index slipped on Wednesday. Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.79 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were up 0.51 percent and Nasdaq 100 e-mini futures NQc1 were up 0.79 percent.

Walmart surges after reporting best sales in more than a decade (BNN) Walmart Inc. bounced back from a lackluster start to the year with the strongest sales gain in more than a decade fueled by its grocery business, brightening the outlook for the overall retail sector. The stock jumped in early trading. Comparable sales at U.S. Walmart stores rose 4.5 per cent in the three months ended in July, the company said Thursday, more than double analysts’ estimates. Grocery sales rose the most in nine years thanks to improved fresh-food offerings, and web revenue growth accelerated from the the previous period. The world’s biggest retailer also boosted its full-year forecasts for comparable sales and adjusted profit.

Amazon in running to acquire Landmark movie chain (BNN) Amazon.com Inc. is in the running to acquire Landmark Theatres, a move that would vault the e-commerce giant into the brick-and-mortar cinema industry, according to people familiar with the situation. The company is vying with other suitors to acquire the business from Wagner/Cuban Cos., which is backed by billionaire Mark Cuban and Todd Wagner, according to the people, who asked not to be identified because the discussions are private. The chain’s owners have been working with investment banker Stephens Inc. on a possible sale, the people said. No final decisions have been made, and talks could still fall apart.

Overnight markets

Overview: US 10yr note futures are down -0.143% at 120-09, S&P 500 futures are up 0.51% at 2835.75, Crude oil futures are up 0.17% at $65.12, Gold futures are up 0.2% at $1187.4, DXY is down -0.07% at 96.63, CAD/USD is up 0.04% at 0.7607.

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 US tsys rallying across the curve, yields 2-3bps lower on heavier volume in TY futures, 10Y 2.87 (-2.5bps). Little reaction to stronger July Retail Sales/Aug Empire Manuf data.  “Risk off” session overnite despite Turkish lira being higher for a 3rd day after central bank made it more expensive to short the xcy. Turkey also doubled tariffs on select US imports. Stock futures lower, S&P -0.57%, Nasdaq -0.80%. China’s stock index fell 2.4% after Q2 earnings from Tencent missed exp, the stock is down ~10% this week. Core EGBs higher led b y UK gilts underpinned by weakness in stocks and July inflation coming in as expected.  GOCs higher in line with tsys, 10Y 2.29%. New CMB 10Y ($2.0bln ~41bps) & 5Y FRN to price this morn. 10Y WI indicated 40.5/40 on screen. 

News headlines

Tencent Hits Tech as Miners Sink European Stocks: Markets Wrap (Bloomberg) U.S. equity futures tracked declines across both Europe and Asia on Wednesday as disappointing earnings from Chinese tech giant Tencent Holdings added to a gloomy mood across global markets. Treasuries climbed, the dollar rose to the highest in 14 months and metals slumped. Contracts for the Dow, Nasdaq and S&P 500 were already edging lower before Tencent reported its first profit drop in at least a decade, spurring further declines. After a positive start to the European session, raw material producers pulled the Stoxx Europe 600 Index down as copper and zinc fell to the lowest in more than a year.

Turkey Just a Test Case as Quantitative Tightening Era Nears (Bloomberg) Turkey is just a drill. A push by major central banks to reverse crisis-era policies is primed to accelerate into 2019 amid plans for higher interest rates and smaller balance sheets. So-called quantitative tightening then risks sucking dollars and euros from nations whose governments and companies binged on cheap debt without improving the fundamentals of their economies.

Amazon Prime Day May Have Boosted U.S. Retail Sales (Bloomberg) A key gauge of U.S. retail sales probably got a boost in July from Amazon.com Inc.’s Prime Day promotion. That’s set to be a bright spot in an otherwise subdued report Wednesday that reflects drags from auto sales and fuel prices. With popular items including the Instant Pot cooker and the 23andMe Inc. genetic test, global sales during Amazon’s 36-hour Prime Day event in mid-July exceeded the company’s other recent promotions including Black Friday and 2017’s Prime Day. Such purchases may prop up the so-called retail “control group” — which excludes auto dealers, gasoline stations, building materials and food services — while the overall figures show a weaker increase than in the prior month.

Turkey doubles tariffs on some U.S. imports; lira rallies (Reuters) Turkey doubled tariffs on some U.S. imports including alcohol, cars and tobacco on Wednesday in retaliation for U.S. moves, but the lira rallied further after central bank’s liquidity moves had the effect of supporting the currency. Ankara acted amid increased tension between the two NATO allies over Turkey’s detention of a Christian American pastor and other diplomatic issues, which have helped send the lira tumbling to record lows against the dollar.

Chinese oil importers shun U.S. crude despite tariff reversal (Reuters) Chinese oil importers are shying away from buying U.S. crude as they fear Beijing’s decision to exclude the commodity from its tariff list in a trade dispute between the world’s biggest economies may only be temporary. Not a single tanker has loaded crude oil from the United States bound for China since the start of August, Thomson Reuters Eikon ship tracking data showed, compared with about 300,000 barrels per day (bpd) in June and July. The United States and China have been locked in a tit-for-tat trade spat over the last few months, but crude was dropped from China’s final list of tariffs on $16 billion in U.S. goods announced last week.

Metals tariffs ‘not a shot against Canada’: Major U.S. steel exec (BNN) The former CEO of America’s largest steel producer says U.S. President Donald Trump’s use of metals tariffs against both its allies and enemies is not “a shot against Canada.” “The people of Canada should not take this as a shot against Canada,” Dan DiMicco, chairman emeritus and former chief executive of Nucor told BNN Bloomberg in an interview on Tuesday. “This is a much bigger issue than any one country. And, what we’ve asked for is: ‘Okay. Sit down. Talk with us. Let’s put together a plan that works for Canada and works for us.’” “We need to work together and we can make this work so it’s mutually okay for all of us, but it’s not destructive for any of us.”

Pot stocks fall as Ontario delays rollout of stores to 2019 (BNN) Canadian pot stocks retreated Tuesday after the country’s largest province said it will delay the launch of bricks-and-mortar cannabis stores until six months after legalization. Canopy Growth Corp. closed trading down 8.25 per cent, Aphria Inc. lost 9.54 per cent and Aurora Cannabis Inc. slid 9.8 per cent on Tuesday.  Ontario’s Progressive Conservative government said Monday it will start cannabis sales with an online-only retail model when marijuana is legalized on Oct. 17, followed by private retail sales on April 1. This is an abrupt policy change from the former Liberal government, which planned to sell cannabis in government run stores, starting with 40 in 2018. 

Overnight markets

Overview: US 10yr note futures are up 0.143% at 120-09, S&P 500 futures are down -0.55% at 2825.25, Crude oil futures are down -1.04% at $66.34, Gold futures are down -0.52% at $1194.4, DXY is up 0.12% at 96.844, CAD/USD is up 0.3% at 0.7635.

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