Commentaires

Market Update US tsys slightly higher, near top of overnite range on avg volume in TY futures (~240k), 10Y 2.85% (-0.7bps). Focus on Fed Powell semi-annual testimony at 10:00ET. Equities weaker (S&P fut -3, Nasdaq -7)  after Netflix, Goldman Sachs earnings. GS stock slightly lower despite Q2 eps $5.98 way ahead of exp $4.66, revenues +19% at $9.40bln vs $8.74bln est.  Core EGBs higher, outperforming tsys – gilt yields ~2bps lower , avg weekly earnings 2.7% below 2.8% exp, better than exp rise in 3mnth employment of 137k. GOCs higher, ~0.5bps tighter vs tsys. 

News headlines

BOE’s Carney Nudged Step Closer to Rate Hike by Jobs Numbers (Bloomberg) U.K. employment rose to a record high in the three months through May and wage pressures showed few signs of abating, keeping the Bank of England on course for an interest-rate increase next month. The number of people in work rose by 137,000, more than forecast, taking the employment rate to 75.7 percent, the highest since records began in 1971. While headline measures of wage growth eased modestly, an underlying gauge climbed to the highest since January.

Trump’s Defense of Putin Proves Too Much for Some Republicans (Bloomberg) President Donald Trump’s equivocation on U.S. intelligence agencies during a news conference with Russian leader Vladimir Putin triggered the most intense backlash from Republicans of anything he’s done since winning election in 2016. Republicans who looked past the release of his recorded remarks about grabbing women and his refusal to denounce neo-Nazi protesters, or complained but took no substantive action when he imposed tariffs on allies found their line in the sand after he sided with Putin against the U.S. intelligence community’s consensus that Russia interfered in the 2016 election.

Toronto Leads Canada’s Biggest Gain in Home Sales This Year (Bloomberg) Canadian home sales rose in June at the fastest pace this year, led by a 17 percent surge in Toronto, a sign the market may be regaining strength. Transactions climbed 4.1 percent from May after touching a five-year low, the Canadian Real Estate Association reported Monday from Ottawa. Benchmark prices fell 0.1 percent on the month and advanced 0.9 percent from a year earlier.

Stocks Drop as Traders Await Powell; Oil Steadies: Markets Wrap (Bloomberg) U.S. equity futures fell alongside European stocks as investors digested a flood of earnings as well as prepared for the latest clues from the Federal Reserve on monetary policy in the world’s biggest economy. Most commodities climbed, as oil steadied. Futures on the Nasdaq slumped as Netflix Inc. tumbled in pre-market trading after delivering disappointing subscriber growth. Results from Goldman Sachs narrowly beat investor expectations, while trading revenue disappointed. On the Stoxx Europe 600 Index, gains in mining and chemicals shares were outweighed by declines in telecommunications and household goods.

TSX futures set to open lower, manufacturing sales data awaited (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Tuesday as investors awaited a report on the country’s manufacturing sales for May. September futures on the S&P/TSX index were down 0.17 percent at 7:15 a.m. ET. Canada’s manufacturing sales data for May is due at 08:30 a.m. ET. On Monday, Toronto Stock Exchange S&P/TSX composite index closes down 66.39 points, or 0.40 percent, at 16,494.73.

Boeing lifts industry demand forecast as air show deals roll on (Reuters) Boeing (BA.N) raised its rolling 20-year industry forecast for passenger and cargo aircraft on Tuesday, as a steady flow of deals on day two of the Farnborough Airshow underscored the industry’s resilience to rising global trade tensions. The world’s biggest planemaker predicted 42,700 industry deliveries over the next two decades, up three percent from its estimate of 41,030 a year ago. That would be worth $6.3 trillion at list prices versus last year’s $6.1 trillion forecast.

Netflix plunges as subscriber growth disappoints in Q2 (BNN) Netflix Inc. () stunned Wall Street by attracting fewer subscribers than expected last quarter, renewing concerns that the video-streaming service has become an investment bubble. The shares plunged as much as 15 per cent after Netflix added 5.2 million users in the period, about a million fewer than it predicted. Its outlook for the current quarter also reflected a deceleration: The world’s largest paid online TV network expects to add 5 million customers, a slower pace than a year earlier.

Overnight markets

Overview: US 10yr note futures are up 0.039% at 120-07, S&P 500 futures are down -0.13% at 2793, Crude oil futures are up 0.16% at $68.17, Gold futures are up 0.1% at $1241, DXY is up 0.1% at 94.607, CAD/USD is up 0.14% at 0.7601.

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

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Market Update Tsys trading slightly lower , yields 0.8-1.5bps higher across the curve, the 10Y 2.84% (+1.3bps), narrow range in TY futures on very light volume (133k, less than 50% of avg). Retail Sales/Empire Man at 8:30, Fed Powell semi annual testimony Tuesday at 10:00.  Equity futures mixed, S&P -0.50, Nasdaq +6. BoA Q2 eps beat estimates, $0.63 vs $0.57, the highest qtry eps since Q2 2008 (BAC +0.6% pre-mkt). Crude under pressure, 69.65 -2.0%, Saudis responding to pressure by Trump to increase supply. GOCs lower , in line with tsys, yields at pre BOC levels, hike was well telegraphed after strong GDP, BOC survey. 

News headlines

Trump and Putin Begin Helsinki Summit With Handshake at Palace (Bloomberg) President Donald Trump began his meeting with Vladimir Putin in Helsinki on Monday, testing his campaign pledge to revive ties with Russia amid pressure to confront the Kremlin leader over election meddling and growing concern that the U.S. is abandoning the current international order. The highly anticipated event is to start with 90 minutes in which the former property developer and the former KGB agent meet one-on-one, with only their respective translators in attendance. For Putin, the meeting is a win even before it began, as it helps restore an image of parity with the U.S. that Russia lost after the collapse of the Soviet Union.

China’s Cooling Economy Spells Trouble Ahead for Global Growth (Bloomberg) Confirmation that China’s economy is slowing amid an escalating trade war is a worrying omen for global growth. Data released since Friday has affirmed what’s been expected for some time: That an ongoing campaign to curtail credit is putting the brakes on the world’s second-largest economy. Given that China generates as much as a third of global growth, that’s adding to signs that the best world expansion in years is plateauing.

BOE Gets Vital Economic Healthcheck Before August Meeting (Bloomberg) Bank of England policy makers are getting a crucial glimpse of the health of the U.K. economy before their crunch August meeting. A deluge of numbers on wages, inflation, retail sales and public borrowing are coming over the next five days. While a similar run of reports prompted the bank to back away from an interest-rate increase in May, this time appears different, with recent indicators looking more positive.

Stocks Struggle Amid Earnings; Dollar Declines: Markets Wrap (Bloomberg) U.S. equity futures were steady and European stocks slipped as traders looked toward company results after mixed economic data out of China spurred declines for Asian shares. The dollar weakened against most peers. Futures on the S&P 500 edged lower while those for Nasdaq and the Dow pointed to a flat open. Most of the industry groups fell on the Stoxx Europe 600 Index, overwhelming gains by banks after Deutsche Bank AG surprised with an early forecast of strong earnings. Bank of America Corp. and BlackRock Inc. also reported better-than-expected earnings. Shares in Asia fell earlier, with volumes down in most markets and Japan shut for a holiday.

Airbus signs preliminary deal for 80 A320neo jets with leasing firm (Reuters) European planemaker Airbus (AIR.PA) said on Monday it had signed a memorandum of understanding to sell 80 of its A320neo passenger jets to an unidentified global aircraft leasing company. The deal, announced at the Farnborough Airshow, would be worth around $8.8 billion at list prices.

TSX futures lower as oil prices slip (Reuters) Futures for Canada’s main stock index were lower on Monday as oil prices fell on the back of easing concerns about supply disruptions and potential production increases by countries such as Russia. September futures on the S&P/TSX index were down 0.1 percent at 7:15 a.m. ET. Foreign and domestic securities data is due at 8:30 a.m. ET The Toronto Stock Exchange’s S&P/TSX fell 6.30 points, or 0.04 percent on Friday, to 16,561.12 as materials and financials weighed.

U.S. lifts ban on China’s ZTE after it pays US$1.4B penalty (BNN) The U.S. Commerce Department has lifted the ban on American firms selling products to China’s ZTE Corp., removing the final hurdle for the company to start rebuilding its business. The ban was removed after ZTE paid the final tranche of a US$1.4 billion penalty by placing US$400 million in escrow at a U.S. bank, the department said in an emailed statement on Friday. That sum comes in addition to US$892 million in penalties the telecommunications-equipment maker has paid to the U.S. government after pleading guilty for violating sanctions, it said.

Canada’s big banks raise prime rate to 3.7% after Bank of Canada hike (BNN) Canadian banks say they will raise their prime lending rate after the Bank of Canada increased its overnight lending rate to financial institutions. Royal Bank (), TD Canada Trust (), BMO (), CIBC (), National Bank (), and Scotiabank () all say they will increase their prime rate by a quarter of a percentage point to 3.70 per cent, effective Thursday. The rates had previously been set at 3.45 per cent. The increase will raise the cost of borrowing for customers with loans linked to the prime rate such as variable rate mortgages and lines of credit. 

Overnight markets

Overview: US 10yr note futures are down -0.052% at 120-10, S&P 500 futures are down -0.04% at 2802, Crude oil futures are down -1.52% at $69.93, Gold futures are up 0.2% at $1243.7, DXY is down -0.22% at 94.469, CAD/USD is down -0.12% at 0.7609.

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

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Market Update Tsys higher, near top of  narrow o/n range on light volume (250k TY), before non farm payrolls at 8:30 (+185k exp). USD index, equities slightly weaker, little reaction to imposition of tariffs between the US & China. GOCs higher, in line with tsys, before June Employment data, expected to show a 30k rebound in full time employment after May’s 31k decline.  Average hourly earnings, which showed the fastest rate of increase since April 2009 in May, are expected to  drop to 3.7% from 3.9%. 

News headlines

China’s Tariff Response Takes Effect After Trump Ignites Trade War (Bloomberg) President Donald Trump threatened to impose tariffs on every single Chinese import into America as the world’s two largest economies exchanged the first blows in a trade war that isn’t set to end anytime soon. After months of rhetoric, a 25 percent levy on $34 billion of Chinese goods entering the U.S. took effect just after midnight Washington time on Friday with farming plows and airplane parts among the products targeted. China hit back immediately via duties on U.S. shipments including soybeans and automobiles.

Payrolls Data Comes Up Against Trade War Artillery: Taking Stock (Bloomberg) With ink still drying on the U.S.-China tit-for-tat tariffs, S&P futures are sending the signal that the market is looking for the next shoe to drop, be it nonfarm payrolls due out shortly or a further ratcheting up of tensions. Trade rhetoric has been fatiguing markets for months, but what is different now is the follow-through from the administration. Strategists were mixed on how to play the development. Wells Fargo saw the damage as potentially “short-lived and contained,” whereas Credit Suisse was looking for the all-important details on implementation.

Stocks Slip as Tariffs Sour Mood Before Jobs Data: Markets Wrap (Bloomberg) European stocks edged lower and U.S. equity-index futures slipped after China said it’s retaliating to President Donald Trump’s trade tariffs that kicked in Friday. The dollar dipped as traders looked ahead to American jobs data, while Treasuries held steady. Carmakers and miners declined as the Stoxx Europe 600 Index inched toward its first drop in four days, while defensive stocks including utilities and food companies were among the gainers, underscoring the cautious mood. Deutsche Bank AG rose on speculation of takeover bids. Futures on the S&P 500, Dow Jones and Nasdaq declined ahead of the monthly U.S. payrolls figures due later on Friday. The euro posted a modest rise after a jump in German industrial production, while crude oil fell along with most industrial metals.

TSX futures down as oil slips due to Saudi boost, trade war (Reuters) Futures pointed to a lower opening for Canada’s main stock index on Friday as oil prices dipped due to higher output from top exporter Saudi Arabia and under pressure from a trade war between the United States and China. Oil slipped towards $77 a barrel after Saudi Arabia told OPEC it raised production by almost 500,000 barrels per day last month. September futures on the S&P/TSX index were down 0.37 percent at 7:15 a.m. ET.

Deutsche Bank shares spike on report of interest from JPM and ICBC (Reuters) Shares in Germany’s troubled Deutsche Bank (DBKGn.DE) jumped by up to 6 percent on Friday following a magazine report that JPMorgan (JPM.N) and Industrial and Commercial Bank of China (ICBC) (601398.SS) may be interested in taking a stake. Business weekly WirtschaftsWoche, citing regional government sources, also said Chancellor Angela Merkel had met Axel Weber, the former Bundesbank head who is now chairman of Swiss bank UBS (UBSG.S), to sound out his views on Deutsche Bank.

Carbon tax proceeds to go directly to Ontario residents: Trudeau (BNN) Ontario residents, and not the newly elected Progressive Conservative government, will receive the proceeds of a carbon price imposed on the province by the federal government, Prime Minister Justin Trudeau said Thursday. Trudeau made the comments moments after he met with Ontario Premier Doug Ford, who has already begun the process of scrapping the province’s cap-and-trade system – in defiance of Ottawa’s insistence that all provinces put a price on greenhouse gas emissions.

Boeing’s US$4.75B Embraer deal leaves long to-do list (BNN) After Boeing Co. and Embraer SA spent months hammering out the framework for a US$4.75 billion plane making partnership, the companies are ready to take the next step: yet more talks. Crucial details about the financial underpinnings of the proposed venture announced Thursday still need to be figured out, a name needs to be chosen and a Brazil-based management team appointed. Officials are striving to finalize terms by late October or early November, and then they’ll seek the blessings of regulators in 10 countries.

Overnight markets

Overview: US 10yr note futures are up 0.078% at 120-11, S&P 500 futures are down -0.18% at 2733.5, Crude oil futures are down -0.6% at $72.5, Gold futures are down -0.24% at $1255.8, DXY is down -0.11% at 94.291, CAD/USD is up 0.01% at 0.7614.

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

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