Commentaires

Market Update

Tsys lower, lower end of overnight range , US 10Y 2.143 (+1bps), equities firmer (S&P futs + 4), gold weaker, crude unch (48.10), while the USD is higher for a second day. Tsys were  pressured in European trading, as Dutch 10Y auction weighed as did the German 30Y linker supply. Gilt 10Y yields higher for third day, 10Y 1.09% after inflation rose more than exp. in August with core inflation the highest in almost six years. OIS mkts still not pricing a full hike until Sep 2018, thou odds for a hike by the second half of 2018 have risen sharply over the past week. Quiet on the data front in the US, JOLTS at 10:00am. The US auctions $20bln in 10Y notes at 1:00pm. GOCs lower, yields 1bp higher in line with tsys. Lull in tier1 data until next week’s August CPI & Poloz speech on Sep 27th.  Provincial spds opening unch after closing 1bp tighter.

News headlines 

Debt soars past $20 trillion mark for first time (WaPo) The federal government racked up $318 billion in new debt Friday, putting it over the $20 trillion mark for the first time in U.S. history, according to new Treasury Department numbers. The total outstanding federal public debt now stands at $20.162 trillion. The spike came after Congress on Friday approved a new debt holiday, allowing the government to borrow as much as needed to keep the government open through early December. President Trump signed the bill, marking the first debt increase of his young administration. Treasury officials had been bumping up against the debt limit for months, using extraordinary measures such as borrowing from other accounts to keep from breaching the limit, which stood at $19.8 trillion until last week’s change. Now free from the debt ceiling, the government was able to begin borrowing again, racking up the $318 billion of debt in one day.

UK inflation rate rises to 2.9% (BBC) The UK’s inflation rate climbed to its joint highest in more than five years in August as the price of petrol and clothing rose. UK inflation measured by the Consumer Prices Index rose to 2.9% in August, up from 2.6% in July, figures show. The fall in the value of sterling since the EU referendum continued to be a major impetus for rising prices, the Office for National Statistics said. But a rebound in the price of oil also had an impact, pushing up fuel prices. The bigger-than-expected rise in inflation comes ahead of the Bank of England’s next announcement on interest rates on Thursday. However, economists said the Bank was still highly unlikely to raise rates at the meeting.

UN passes fresh sanctions on North Korea (CNN) The United Nations Security Council unanimously adopted a US-drafted resolution to impose new sanctions on North Korea on Monday — a move that comes just one week after the rogue nation carried out its sixth and largest nuclear test. The resolution is designed to accomplish six major goals: cap North Korea’s oil imports, ban textile exports, end additional overseas laborer contracts, suppress smuggling efforts, stop joint ventures with other nations and sanction designated North Korean government entities, according to a US official familiar with negotiations.

World stocks build on record highs as Irma weakens (Reuters) World stocks climbed to record highs on Tuesday as an easing in tensions over North Korea and signs that Hurricane Irma was causing less damage than feared in the United States boosted risk appetite. The MSCI All Country World Index edged up 0.2 percent, building on Monday’s 0.9 percent gain — its fourth-biggest so far this year.

German economy to grow by more than two percent this year: BDI (Reuters) The German economy is set to grow by more than 2 percent this year adjusted for calendar effects, which would be the strongest rate in six years, the BDI industry association said on Tuesday as it lifted its growth forecast for Europe’s biggest economy.

OPEC Data to Show August Output Falling as Saudis Cut (Bloomberg) OPEC’s estimate of its oil production is expected to show a decrease in August from July as the group’s biggest member Saudi Arabia pared output, according to a person familiar with the matter.

May’s Brexit Law Passes First Hurdle as Rebels Demand Re-Writes (Bloomberg) Theresa May’s plan for taking Britain out of the European Union passed its first parliamentary hurdle as pressure mounted on her main political rival, Labour leader Jeremy Corbyn, to clarify his stance on single market membership. In a vote after midnight, lawmakers backed the prime minister’s repeal bill after her government promised to discuss critics’ concerns before they have to vote again. Labour has already proposed a first set of amendments. The focus now turns to Corbyn, who is due to address the Trades Union Congress in Brighton Tuesday after sowing confusion over his position on Brexit.

Here’s what Wall Street expects out of the Apple iPhone event (CNBC) Analysts are giddy with optimism, predicting Apple will unveil the most innovative iPhone in years on Tuesday. Apple Special Event : Join us here September 12 at 10 a.m. PDT to watch the keynote, the first-ever event at the Steve Jobs Theater.

Overnight markets 

Overview: US 10yr note futures are down -0.209% at 126-24, S&P 500 futures are up 0.14% at 2489.25, Crude oil futures are up 0.58% at $48.35, Gold futures are down -0.22% at $1332.7, DXY is up 0.09% at 91.958, CAD/USD is up 0.25% at 0.8237.

US Economic Data 

Canadian Economic Data 

There is no major economic data release 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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update 

Tsys lower, prices gapping lower overnite on ‘risk-on’ after Hurricane Irma weakened and N. Korea did not fire a missile on Saturday as expected, the US 10Y 5bps higher @2.10% with the tsy curve ~1bp steeper.  Global equities higher, Euro stoxx +1.0%, S&P futures +11pts. Core Euro bonds also weaker lead by  UK gilts yields ~5bps higher, bunds outperforming bund/gilt spd 2bps wider –  mkt looking ahead to heavy data week in the UK with CPI/PPI Wed followed by BOE on Thursday. Also Austria is looking to issue 5Y and 100Y bonds in the near future. In Canada, GOCs are lower, lagging the pullback in tsys slightly (1-2bps), after spreads blew out ~20-30bps last week, GOC 10Y 2.02% highest since July 31^st.  Provis opening unch after spds widened 3bps last week despite higher all in yields. Quebec fiscal update released Friday showed a surplus for the three months ended June 30^th 2017 of $98mln vs a deficit of $529mln last yr. For 2017-18 Quebec forecasts a balanced budget. The province also announced plans to issue ultra long bonds.

News headlines 

Irma Weakens as It Heads Past Tampa, Cutting Damage Forecast (Bloomberg) Hurricane Irma weakened as it moved past Tampa, leaving in its wake at least 4.7 million without power, millions temporarily displaced and a forecast for as much as 15 inches of rain in what may go down as one of the worst storms in Florida’s history.

Hurricanes Irma and Harvey to hit oil demand – Goldman Sachs (CNBC) Oil demand is likely to fall by about 900,000 barrels per day (bpd) in September due to the combined impact of hurricanes Harvey and Irma, Goldman Sachs said on Monday.

Trump Debt Limit Deal Undermines Trust Among GOP on Tax Overhaul (Bloomberg) The White House said President Donald Trump cut a short-term debt ceiling and government spending deal with Democrats to clear the deck for a major tax bill. But the agreement could be complicating tax efforts by eroding trust within his own party. Not only has the deal sowed doubt among the GOP about its unpredictable president, but it’s also driving a wedge between Republicans and their leaders in Congress, just as the party is desperate to deliver on one of its top priorities.

U.N. Security Council to vote Monday on weakened North Korea sanctions: diplomats (Reuters) The U.N. Security Council is set to vote on Monday on a watered-down U.S.-drafted resolution to impose new sanctions on North Korea over its latest nuclear test, diplomats said, but it was unclear whether China and Russia would support it.

US Economic Data 

There is no economic data scheduled for today.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

Tsys trading mildly higher, 10Y 2.035% after falling below 2.02% in Asia on safe haven bid as Hurricane Irma approaches Florida, heavy volume in TY futures (515k). EGBs lower, sovereign spreads wider following comments from ECB member Likanen on possibility of QE taper in Dec. European equities slightly lower, S&P futs -6.5pts, crude moving higher above $49.00. GOCs lower, spds ~2bps wider vs tsys with little reaction to stronger Cdn employment data 22k vs 15k exp in July, yet the mix  less favorable with part time +110k , full-time -88k.

News headlines 

Dollar Tumbles as Yen, Euro Rally on Irma, ECB: Markets Wrap (Bloomberg) The dollar tumbled to its weakest level since the start of 2015 amid fading expectations of another U.S. rate increase this year. Havens including gold and the yen rallied as North Korea tensions and natural disasters unsettled investors.

Oil steady as Irma heads for Florida, Saudi Arabia cuts supply (Reuters) Oil prices steadied on Friday after almost a week of sharp rises as Hurricane Irma, one of the most powerful storms in a century, drove towards Florida after tearing through the Caribbean.

After rate hike, Canadian housing braces for ‘biggest rule change of all time’ (Financial Post) It didn’t take long for the impact of rising rates to hit the market. People rushed to lenders Thursday to lock in contracts and get pre-approved mortgages after the Bank of Canada raised its overnight lending rate the day before.

Irma Batters Reinsurance Mutual Fund as Hurricane Nears Florida (Bloomberg) Stephen Barnes suffered damage from Hurricane Irma even before it hits Florida. He owns Stone Ridge Reinsurance Risk Premium Interval Fund, a mutual fund that dropped more than 8 percent on Tuesday and slid further this week as the hurricane wreaked havoc in the Caribbean. In calmer times, Barnes has enjoyed solid returns uncorrelated with stocks and bonds while accepting risks that the fund that may be on the hook when disaster strikes.

UK manufacturers enjoy strongest growth this year but trade weak (Reuters) Britain’s manufacturing output expanded at the strongest pace this year in July, but there was little sign of improvement in the trade deficit despite sterling’s sharp fall since last year’s Brexit vote.

China stock exchanges to tighten rules on financing using stock as collateral (Reuters) China’s securities regulator on Friday published draft rules that would restrict borrowing using stocks as collateral, part of efforts to reduce leverage in the financial system and ward off systemic risks.

Overnight markets 

Overview: US 10yr note futures are up 0.025% at 127-18, S&P 500 futures are down -0.21% at 2459.5, Crude oil futures are down -0.14% at $49.02, Gold futures are up 0.33% at $1354.8, DXY is down -0.52% at 91.189, CAD/USD is up 0.04% at 0.825.

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230