Comments

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

Market Update

Tsys higher, yields 2-3 bps lower with the 10Y 2.08%, prices rising with German bunds after ECB decision to leave rates unchanged as expected.  According to Bloomberg survey, many analysts had expected a change in forward guidance which was not the case, hence the uptick in bunds. European stocks higher, thou trailing off since mid morning, S&P futures unch. GOC yields diverging from tsys for a second day after yesterday’s surprise BOC rate hike, yields ~3bps higher across the curve.

News headlines 

Stocks Gain With Euro Before ECB; Dollar Declines: Markets Wrap (Bloomberg) Stocks in Europe gained and the euro strengthened as investors awaited the latest policy guidance from the region’s central bank. The dollar weakened as North Korea tensions and the increasingly cloudy Fed outlook outweighed positive sentiment from the U.S. debt ceiling extension.

Euro grinds higher before ECB, global stocks stutter (Reuters) The euro climbed and stocks inched higher on Thursday, as markets waited to hear just how close the European Central Bank is to scaling back its more than 2 trillion euro ($2.75 trillion) stimulus program.

Oil dips on fears Hurricane Irma could hit crude shipments, rising Libya output (Reuters) Oil prices dipped on Thursday over fears that Hurricane Irma in the Caribbean could interrupt crude shipments in and out of the United States, and as Libyan output began to recover from disruptions.

Big banks raise consumer lending rates after Bank of Canada hike (Financial Post) Canada’s big banks will raise their prime lending rates to 3.2 per cent, effective Thursday, after the Bank of Canada boosted its trendsetting policy rate. The Bank of Canada on Wednesday raised its target policy rate by 25 basis points to 1.0 per cent from 0.75 per cent.

Hudson’s Bay explains weak second-quarter earnings as U.S. investor cries foul (Financial Post) Hudson’s Bay Co. is better off than some traditional department stores as it cuts costs, revamps its stores and invests in its expanding web operations, company executives told investors made skittish by widespread industry weakness.

Exxon CEO says Harvey had bigger impact on Mexico operations: CNBC (Reuters) Exxon Mobil Corp Chief Executive Darren Woods told CNBC on Thursday that Hurricane Harvey had a bigger impact on the company’s Mexico operations, and said that Irma had not impacted any of the oil major’s offshore operations yet.

Overnight markets 

Overview: US 10yr note futures are up 0.172% at 127-10, S&P 500 futures are down 0% at 2463.75, Crude oil futures are down -0.96% at $48.69, Gold futures are up 0.41% at $1344.5, DXY is down -0.45% at 91.877, CAD/USD is down -0.49% at 0.8219.

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

Market Update

US tsys trading slightly lower, 10Y 2.073% (+1.5bps), after the 10Y hit a nine-month low 2.05% in yesterday’s risk-off rally on Trump’s military equipment comments as well as dovish remarks from Fed speakers Brainard & Kashkari.  European stocks recovering from losses after Asian equities fell, Nikkei down for a third day.  Core European bonds lower as well, German 10Y bund 0.34% – eurozone data was second tier, German factory orders fell 0.7% in July vs 0.2% exp, PMIs were mixed. In Canada, GOCs lower, 1-2bps wider vs tsys , curve 2bps steeper before BOC at 10:00am. Provincial & corp supply weighed heavily on GOC yest,  Can/US 10Y 5 bps wider in largest move since July 28th.  Mkt pricing in ~30% odds of a rate hike, consensus is BOC waits until October for second hike.  Provi spreads 0.5bps wider this morning after supply yest pushed 1.5bps wider. Alberta reopened longs yest @ 92 or 8.5 over  Ontarios, the roll 8.5/8.0 this morn.

News headlines 

Stocks Slide as Headwinds Build; Treasuries Steady: Markets Wrap (Bloomberg) There was little optimism on display in Wednesday trading, with North Korean tensions simmering, another hurricane bearing down on the U.S. and the American debt ceiling looming. European stocks followed Asian peers lower and most industrial metals dropped.

Oil up after Harvey fallout; Hurricane Irma heads into Caribbean (Reuters) Oil prices rose on Wednesday as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Storm Harvey.

Britain could still reverse Brexit, former minister Heseltine says (Reuters) Brexit could be reversed if economic pain prompts a change in public opinion that brings a new generation of political leaders to power in Britain, former Conservative minister Michael Heseltine said.

A rate hike is coming — what’s unclear is how the economy will react (Financial Post) No one doubts the Bank of Canada will raise interest rates again soon. The country’s economy has turned out to be much stronger than anyone was predicting only a few months ago, giving policy makers scope to bring rates back up to more normal levels.

Nearly half of Canadians would face financial crunch if paycheque delayed by even a week, survey shows (Financial Post) Almost half (47 per cent) of Canadian employees say they’d be hard-pressed to meet their financial obligations if their paycheques were delayed by even a week, says a survey being released Wednesday.

Toronto home sales fall in August, prices down 20 percent from peak (Reuters) Toronto home sales plummeted in August from a year earlier and prices were down more than 20 percent from April as government moves to cool a long housing boom in Canada’s largest city continued to douse demand, data showed on Wednesday.

Overnight markets 

Overview: US 10yr note futures are down -0.012% at 127-13, S&P 500 futures are up 0.15% at 2463.5, Crude oil futures are up 1.07% at $49.18, Gold futures are down -0.03% at $1344.1, DXY is down -0.03% at 92.225, CAD/USD is up 0.14% at 0.8071.

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