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16/07/2018

by admin | Jul 16, 2018 | comments

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.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.93%	2 Year	2.586%
5 Year	2.059%	5 Year	2.737%
10 Year	2.143%	10 Year	2.836%
30 Year	2.195%	30 Year	2.942%

US Economic Data

8:30 AM	Empire Manufacturing, Jul est 21.0 (25.0 prior)
	Retail Sales Advance MoM, Jun est 0.5% (0.8% prior)
	Retail Sales Ex Auto MoM, Jun est 0.3% (0.9% prior)
	Retail Sales Ex Auto and Gas, Jun est 0.4% (0.8% prior)
10 :00 AM	Business Inventories, May est 0.4% (0.3% prior)

Canadian Economic Data

8:30 AM	Int’l Securities Transactions, May (9.13b prior)
9:00 AM	Existing Home Sales MoM, Jun est 1.7% (-0.1% prior)
10:00 AM	Bloomberg Nanos Confidence, Jul 13^th (54.5 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

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06/07/2018

by admin | Jul 6, 2018 | comments

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.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.913%	2 Year	2.545%
5 Year	2.054%	5 Year	2.726%
10 Year	2.137%	10 Year	2.827%
30 Year	2.181%	30 Year	2.944%

US Economic Data

8:30 AM	Trade Balance, May est -43.7b (-46.2b prior)
	Change in Nonfarm Payrolls, Jun est 195k (223k prior)
	Change in Private Payrolls, Jun est 190k (218k prior)
	Change in Manufact. Payrolls, Jun est 15k (18k prior)
	Unemployment Rate, Jun est 3.8% (3.8% prior)
	Average Hourly Earnings MoM, Jun est 0.3% (0.3% prior)
	Average Hourly Earnings YoY, Jun est 2.8% (2.7% prior)
	Labor Force Participation Rate, Jun est 62.7% (62.7% prior)

Canadian Economic Data

8:30 AM	Int’l Merchandise Trade, May est -2.20b (-1.90b prior)
	Net Change in Employment, Jun 20.0k (-7.5k prior)
	Unemployment Rate, est 5.8% (5.8% prior)
	Hourly Earnings Permanent Empl YoY, Jun est 3.7% (3.9% prior)
	Full Time Employment Change, Jun est 30.0 (-31.0 prior)
	Part Time Employment Change, Jun est -10.0 (23.6 prior)
	Participation Rate, Jun est 65.4 (65.3 prior)
10:00 AM	Ivey Purchasing Managers Index SA, Jun (62.5 prior)

Disclosure and Disclaimer

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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05/07/2018

by admin | Jul 5, 2018 | Uncategorized

Market Update Tsys trading lower, limited reaction to lower than exp ADP (177k vs 190k), 10Y 2.85%, above avg volume in TY futures (422k). ‘Risk on’ rally in stocks(S&P futures +21, Nasdaq fut +62) as EU officials are considering reducing tariffs on imported cars from the US, despite tomorrows scheduled implementation of $34bln in tariffs on Chinese goods. ISM Non-Manufacturing and FOMC Minutes still on deck. GOCs recovering earlier losses along with the bounce in tsys, spds 1-2bps tighter vs US. The BOC auctions $3.0bln in reopened 2% Sep 1 2023s with the roll vs current 5s 3.0/2.8 -fairly steady over the last few weeks despite 20bp flattening in the underlying 2s10s curve since the last 5Y auction May 17^th.

News headlines

Toronto Home Sales Post Biggest Jump Since 2004 (Bloomberg) Toronto home sales jumped the most in more than a decade last month, a sign that Canada’s biggest housing market is rebounding from the chill brought on by tighter lending regulations and higher borrowing costs in the past few months. Sales in June rose 2.4 percent from the same period a year ago, according to data released Thursday from the Toronto Real Estate Board. Seasonally adjusted sales climbed 18 percent from May, the biggest monthly gain since 2004.

The China-U.S. Power Struggle Is Just Beginning (Bloomberg) Chinese President Xi Jinping has an ambitious master plan for his country’s transformation into a wealthy, technology-driven global economic power. And U.S. companies need not apply. That’s why the current trade rumble between the U.S. and China, in which the Trump administration is threatening to slap tariffs on $34 billion of Chinese imports and Beijing promises to respond in kind, is far more than just a spat over market restrictions, intellectual property rights and the epic U.S. deficit.

May Fights for Brexit Plan as Austria Raises Idea of Extension (Bloomberg) As U.K. Prime Minister Theresa May fights to win Cabinet backing for her Brexit plan with the clock ticking down to exit day, Austria raised the prospect than an extension to the negotiating deadline could be considered. Austria holds the European Union’s rotating presidency, a role it will keep through the end of the year — a crucial period in Brexit talks. Chancellor Sebastian Kurz said on Thursday a no-deal Brexit must be avoided at all costs. Asked if that meant extending the March 2019 deadline for negotiations, he said: “We will see.”

U.S. Stock Futures Follow Europe Jump; Euro Rises: Markets Wrap (Bloomberg) U.S. equity futures rallied alongside European peers, while Asian shares dropped to a nine-month low as traders prepare for the implementation of fresh trade restrictions between America and China. The euro advanced on the prospect of earlier-than-anticipated monetary tightening. Futures on the S&P 500, Nasdaq and Dow all jumped, while European automakers headed for the biggest gain in two years on hopes of a cross-Atlantic tariff deal. That helped spur the Stoxx Europe 600 Index after gauges in Tokyo, China and Hong Kong all fell. The dollar and Treasuries both dropped, while the yuan held steady. Commodities, heavily exposed to international trade, edged lower. Iron ore futures in Singapore hit the lowest since November.

TSX futures rise on higher oil prices (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Thursday as oil prices rose due to potential disruptions to flows from Iran and the Middle East. Crude prices had earlier dropped after U.S President Donald Trump demanded OPEC to cut prices. However, an Iranian threat to block shipments through the Strait of Hormuz, a major route for transporting crude in the Gulf, supported prices.

Canadians ‘ready to go to war’ with U.S. over tariff fight (BNN) A majority of Canadians are ready to boycott the U.S. in response to the Trump administration’s recent trade actions, according to a new poll. The Nanos Research survey, conducted for CTV News, reveals the majority of Canadians are likely to cut back on travel to the U.S. (73 per cent) and boycott goods made south of the border (72 per cent). Furthermore, 68 per cent of respondents said they’re likely to avoid U.S. retailers in Canada. Canadians are “ready to go to war,” Nik Nanos, one of the country’s top public opinion pollsters, told CTV News’ Melanie Nagy.

New finance minister declares Ontario is ‘open for business’ (BNN) Ontario’s new finance minister wants to get the message out that the province is open for business. In his first television interview since being appointed Ontario’s finance minister, Vic Fedeli told BNN Bloomberg on Wednesday that he expects his new government to create a better investment environment in the province. “We are lowering corporate taxes, we are lowering small business taxes, we are lowering hydro costs, eliminating cap-and-trade,” Fedeli told BNN Bloomberg. “Those are all key signals to the business community that Ontario is open for business.”

Overnight markets

Overview: US 10yr note futures are down -0.117% at 120-06, S&P 500 futures are up 0.76% at 2734, Crude oil futures are up 0.12% at $74.23, Gold futures are up 0.21% at $1256.1, DXY is down -0.27% at 94.273, CAD/USD is down -0.13% at 0.7618.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.919%	2 Year	2.545%
5 Year	2.076%	5 Year	2.745%
10 Year	2.17%	10 Year	2.857%
30 Year	2.21%	30 Year	2.981%

US Economic Data

7:30 AM	Challenger Job Cuts YoY, Jun 19.6% (-4.8% prior)
8:15 AM	ADP Employment Change, Jun 177k est 190k (178k prior)
8:30 AM	Initial Jobless Claims, Jun 30^th 231k est 225k (227k prior)
	Continuing Claims, June 23^rd 1739k est 1718k (1705k prior)
9:45 AM	Bloomberg Consumer Comfort, Jul 1^st (57.3 prior)
	Markit US Services PMI, Jun est 56.5 (56.5 prior)
	Markit US Composite PMI, Jun (56.0 prior)
10:00 AM	ISM Non-Manf. Composite, Jun est 58.3 (58.6 prior)
14:00 PM	FOMC Meeting Minutes, Jun 13^th