Commentaires
29/09/2017
Market Update
US tsys moving higher after lower August PCE (0.1% vs 0.2% exp) after quiet overnite session, US 10Y 2.30% (-0.5bps) , avg volume in TY futures (250k) after two heavy session s Wed & Thurs. Core Euro bonds outperforming, bund yields 2-3bps lower gilts moving lower since mid morning despite downward revision to Q2 GDP. Carney said the BOE is set to raise rates for the first time in a decade. GOCs sharply higher after July GDP miss – 0.0% vs 0.1% exp, curve 3bps steeper , 2s ~11bps lower since Wed Poloz.
News headlines
Most Economists Agree: Trump Tax Plan Will Widen Budget Deficit (Bloomberg) Twenty-one of 26 economists surveyed by Bloomberg News after Trump and Republican congressional leaders rolled out their tax plan this week predicted it will widen the budget gap over the next 10 years. That forecast flies in the face of Treasury Secretary Steven Mnuchin’s assertion that the program will slash deficits by spurring faster economic growth and thus more federal revenue.
Euro-Area Inflation Stuck Too Low as ECB Debates Stimulus (Bloomberg) Inflation in the euro area failed to pick up in September and underlying price growth weakened, keeping the European Central Bank waiting for the last chapter in the story of the region’s recovery.
UK growth slows to four-year low as BoE prepares rate rise (Reuters) Britain’s economy grew at its slowest pace since 2013 in the 12 months after last year’s Brexit vote, data showed on Friday, painting a subdued picture as the Bank of England prepares to raise interest rates for the first time in a decade.
Exporters, traders feel Canadian dollar pain as Bank of Canada avoids guidance (Reuters) The Bank of Canada’s journey from dove to hawk and back again this year has sent the currency market on a wild ride and put pressure on the central bank to provide better direction, despite eschewing its forward guidance policy years ago.
BlackBerry shares soar by 12% as software sales hit record (The Guardian) The transformation of BlackBerry from a bombed-out, loss-making smartphone maker to a new-look software firm appears to be working: the Canadian business has reported better-than-expected quarterly profits, boosting its shares by more than 12%.
VW’s dieselgate bill hits $30 billion after another charge (Reuters) Volkswagen (VOWG_p.DE) is taking another $3 billion charge to fix diesel engines in the United States, lifting the total bill for its emissions test cheating scandal to around $30 billion.
U.S. economy accelerates in second quarter; hurricanes expected to slow growth (Reuters) The U.S. economy expanded a bit faster than previously estimated in the second quarter, recording its quickest rate of growth in more than two years, but the momentum likely slowed in the third quarter due to the impact of Hurricanes Harvey and Irma. Gross domestic product increased at a 3.1 percent annual rate in the April-June period, the Commerce Department said in its third estimate on Thursday.
Overnight markets
Overview: US 10yr note futures are up 0.012% at 125-18, S&P 500 futures are down -0.06% at 2506.25, Crude oil futures are up 0.14% at $51.63, Gold futures are up 0.03% at $1289.1, DXY is up 0.02% at 93.105, CAD/USD is up 0.17% at 0.8033.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.504% | 2 Year | 1.451% |
| 5 Year | 1.758% | 5 Year | 1.888% |
| 10 Year | 2.1% | 10 Year | 2.301% |
| 30 Year | 2.487% | 30 Year | 2.863% |
US Economic Data
| 8:30 AM | Personal Income, Aug 0.2% est 0.2% (0.4% prior) |
| Personal Spending, Aug 0.1% est 0.1% (0.3% prior) | |
| PCE Deflator YoY, Aug 1.4% est 1.5% (1.4% prior) | |
| PCE Delator MoM, Aug 0.2% est 0.3% (0.1% prior) | |
| PCE Core MoM, Aug 0.1% est 0.2% (0.1% prior) | |
| PCE Core YoY, Aug 1.3% est 1.4% (1.4% prior) | |
| 9:45 AM | Chicago Purchasing Manager, Sep est 58.7 (58.9 prior) |
| 10:00 AM | University of Michigan Sentiment, Sep est 95.3 (95.3 prior) |
Canadian Economic Data
| 8:30 AM | GDP MoM, Jul 0.0% est 0.1% (0.3% prior) |
| GDP YoY, Jul 3.8% est 3.9% (4.3% prior) | |
| Industrial Product Price MoM, Aug est 0.5% (-1.5% 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
28/09/2017
Market Update
US tsys lower, yields 1-3 bps higher in bear steepening move, US 10Y 2.33% (+2bps), heavy volume in TY futures (565k) for a second day. Little reaction to upward revision in US Q2 GDP to 3.1% from 3.0%. Core Euro bonds lower, 10Y bund yield at two month high 0.50%, thou prices off the lows after German national CPI 0.1% as exp. In Canada, GOCs mixed, 2s10s 5bps steeper since Poloz speech yest, 2s rallying ~9bps after Poloz said rate hikes were not on a preset course. Busy day in corps again yest with Alberta Powerline Ltd $1.108bln long deal, followed by the announcement that Metro was in talks to acquire Jean Coutu for $24.50 per share. This morning CIBC 3Y USD fixed & FRN, fixed @ ~70bps (GOCs + 67)
News headlines
Trump Pitches Tax Plan as Historic Cut to Boost U.S. Hiring (Bloomberg) The 10-year Treasury yield rose to 2.348 percent, the highest in two months, as President Donald Trump promoted what he called “the largest tax cut” in U.S. history. The president and Republican leaders put on a show of unity when launching the plan, and stocks surged on hopes that the cuts, which include dropping the corporate rate to 20 percent, will become enshrined in legislation this year.
Loonie weakens as Bank of Canada’s surprise caution leaves bulls reeling (Financial Post) Bank of Canada Governor Stephen Poloz looked to temper recent optimism over the Canadian economy in a speech Wednesday, signalling a more open-ended monetary outlook that could see interest rates move “in either direction” amid fears over rising household debt levels.
Japan Election Turmoil Sets Up Two-Horse Race: Abe Versus Koike (Bloomberg) Japan’s main opposition party agreed to merge with a new group created by Tokyo Governor Yuriko Koike, setting her up as the main challenger to Prime Minister Shinzo Abe as he dissolved parliament ahead of an Oct. 22 election.
U.S. Second-Quarter Growth Revised Upward to 3.1% Annual Pace (Bloomberg) U.S. second-quarter growth was revised up slightly without altering the bigger picture of a consumer- driven economy that also got a healthy contribution from business spending during the period, Commerce Department data showed Thursday.
Toronto, London Among Riskiest Housing Bubble Cities, UBS Says (Bloomberg) Toronto and London are among the cities most at risk of a housing bubble as economic optimism and low borrowing costs push up property values in urban areas worldwide, according to UBS Group AG.
Metro in talks with Jean Coutu about possible merger (CBC) Grocery giant Metro says it is « engaged in exclusive discussions » regarding a possible merger with the Quebec-based Jean Coutu pharmacy chain. Metro announced Wednesday the two are discussing a deal in which it would acquire Jean Coutu at a price of $24.50 per share, to be paid 75 per cent in cash and 25 per cent in shares.
Overnight markets
Overview: US 10yr note futures are down -0.112% at 125-10, S&P 500 futures are down -0.16% at 2500.5, Crude oil futures are up 0.88% at $52.6, Gold futures are up 0.02% at $1288, DXY is down -0.16% at 93.215, CAD/USD is down -0.11% at 0.8023.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.562% | 2 Year | 1.475% |
| 5 Year | 1.804% | 5 Year | 1.924% |
| 10 Year | 2.149% | 10 Year | 2.335% |
| 30 Year | 2.526% | 30 Year | 2.89% |
US Economic Data
| 8:30 AM | GDP Annualized QoQ, 2Q 3.1% est 3.0% (3% prior) |
| Personal Consumption, 2Q 3.3% est 3.3% (3.3% prior) | |
| GDP Price Index, 2Q 1.0% est 1.0% (1.0% prior) | |
| Core PCE QoQ, 2Q 0.9% est 0.9% (0.9% prior) | |
| Initial Jobless Claims, Sep23 272K est 270K (259K prior) | |
| Continuing Claims Sep16 1934K est 1993K (1979K prior) | |
| Wholesale Inventories MoM, Aug est 0.4% (0.6% prior) | |
| 9:45 AM | Bloomberg Consumer Comfort, Sep24 (50.6 prior) |
| 11:00 AM | Kansas City Fed Manf. Activity, Sep est 15 (16 prior) |
Canadian Economic Data
| 7:50 AM | CFIB Business Barometer, Sep 56.9 (59.8 prior) |
Disclosure and Disclaimer
The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.
Ivan Greenstein, Stephan Buu, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
27/09/2017
Market Update
US tsy yields sharply lower on bear steepening move, heavy volume in TY1 futures (~700k) with the US 10Y 2.285 (+5bps), curve US$ higher, Euro stocks +0.50%, crude steady near $52. Core Euro bonds weaker, in line with tsys, 10Y bund yield seven-week high 0.46%. Weakness in tsys/EGBs attributed to delayed reaction to Yellen’s comments yest and progress on tax reform, also Saudi Arabia set to price $12.5bln jumbo USD deal this aft. GOCs lower in line with tsys, yields 2.5-5.5bps higher led by 10s @2.183 (+7.3bps) – a three year high. Poloz highly anticipated speech at noon. Provis quiet yest, spreads unch with supply expected thou issuers may take a pause given the move in yields and Poloz this aft.
News headlines
Atlanta Fed’s Bostic ‘comfortable’ with December hike if economy performs (Reuters) The Atlanta Federal Reserve Bank’s new president, Raphael Bostic, said on Tuesday that recent weak inflation probably means labor markets are still healing from the 2007 to 2009 financial crisis, and he would want “clear evidence” prices were firming before committing to another interest rate increase.
Fed’s Yellen says gradual hikes should continue, despite weak inflation (Reuters) The Federal Reserve needs to continue gradual rate hikes despite broad uncertainty about the path of inflation, Fed Chair Janet Yellen said on Tuesday in remarks that acknowledged the central bank’s struggles to forecast one of its key policy objectives.
U.S. slaps steep duties on Bombardier jets after Boeing complaint (Reuters) The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties on Bombardier Inc’s CSeries jets after rival Boeing Co accused Canada of unfairly subsidizing the aircraft, a move likely to strain trade relations between the neighbors.
Morneau Won’t Budge on Deficits Despite Canada’s Red-Hot Growth (Bloomberg) Canada’s hot economy won’t push Bill Morneau off his deficit spending plans, with the finance minister pledging continued cash for infrastructure and other programs to make the nation’s expansion sustainable in the long-term.
Dollar Gains on Yellen, U.S. Tax Plan; Bonds Slump: Markets Wrap (Bloomberg) The dollar extended gains and bonds fell after Federal Reserve Chair Janet Yellen boosted expectations for an interest-rate rise in December. Stocks advanced as President Donald Trump prepares to lay out his tax-cut plan.
Overnight markets
Overview: US 10yr note futures are down -0.384% at 125-17, S&P 500 futures are up 0.19% at 2500.25, Crude oil futures are up 0.23% at $52, Gold futures are down -0.67% at $1293, DXY is up 0.47% at 93.399, CAD/USD is up 0.41% at 0.8068.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.631% | 2 Year | 1.463% |
| 5 Year | 1.874% | 5 Year | 1.899% |
| 10 Year | 2.181% | 10 Year | 2.289% |
| 30 Year | 2.511% | 30 Year | 2.83% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Sep 22 -0.5% (-9.5% prior) |
| 8:30 AM | Durable Goods Order, Aug. 1.7 est 1.0% (-6.5% prior) |
| Durable Ex Transportation, Aug 0.2 est 0.2% (0.6% prior) | |
| Cap Goods Orders Nondef Ex Air, Aug 0.9 est 0.3% (1.0% prior) | |
| Cap Goods Ship Nondef Ex Air, Aug 0.7 est 0.1% (1.2% prior) | |
| 10:00 AM | Pending Home Sales MoM, Aug est -0.5% (-0.8% prior) |
| Pending Home Sales YoY, Aug est -0.5% (-0,5% prior) |
Canadian Economic Data
There is no economic data scheduled for today.
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