Commentaires

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

Market Update

US tsys higher, yields 4-5bps lower across the curve, US 10Y 2.115% (-5bps) near low of o/n range on heavy volume in TY futures (~438k)- rallying on news Trump will sell military equipment to South Korea and Japan . Core Euro bonds lagging the rally in tsys in front of ECB & BOE decisions later this week as well as heavy supply – Austria sold E1.2bln in 10 & 30Y debt while the UK saw large demand for its 2.5% 2065 gilt syndication.  Light data week in the US , thou Fed speakers & IG corp supply expected to ramp up.  Gasoline futures, while down for a second day, still 20% higher in two weeks, little impact on front end TIPs breakevens so far. In Canada, GOCs are unch, short end yields 0.5bps higher, extending flattening move from last week ahead of BOC tomorrow. The BOC not expected to raise rates this week even as odds have risen sharply from ~25% mid August to over 50% at present. Provi spds 0.5 – 1bp wider on risk off, long supply from HQ & Alberta rumoured . John Deere (A2/A) issuing 5 & 10Y in the US  @ 70/95 (IPT).

News headlines 

Dollar Slips, Stocks Mixed Before Central Bankers: Markets Wrap (Bloomberg) The dollar slipped and European stocks were mixed as traders shifted focus from North Korea to a week packed with central-bank decisions, Federal Reserve speakers and economic data that will help illuminate the path of the global economy.

U.K. Economy Held Back as Services Weaken, Consumers Struggle (Bloomberg) Britain’s economy is failing to recharge after slowing sharply in the first half of the year. IHS Markit said its latest round of industry surveys suggest growth of about 0.3 percent this quarter, matching the pace of the previous three months. It published the forecast after its gauge of services, the biggest part of the economy, indicated the slowest expansion in almost a year in August. The index drop was bigger than economists had forecast.

Rate Hike Imminent as Poloz Takes Hawkish Turn (Bloomberg) 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.

South Korea seeks bigger warheads, North Korean ICBM reportedly on the move (Reuters) South Korea said on Tuesday an agreement with the United States to scrap a weight limit on its warheads would help it respond to North Korea’s nuclear and missile threat after it conducted its sixth and largest nuclear test two days ago.

China’s Oil Lifeline to North Korea Targeted After Nuclear Blast (Bloomberg) Even before North Korea detonated its most powerful nuclear bomb yet, Japan was calling for moves to cut off its oil supply. Afterward, U.S. President Donald Trump threatened to halt all trade with any country that does business with Kim Jong Un’s regime. China, which supplies most of its food and fuel, on Monday called the warning “unacceptable.”

Nafta Negotiators Are Said to Tackle Labor, Rules of Origin (Bloomberg) Officials from the U.S., Canada and Mexico will start to tackle some of the tougher issues in the North American Free Trade Agreement as they discuss labor, dispute resolution and rules of origin for products at a negotiating session in Mexico City, according to two people familiar with the schedule.

Watch for possible big moves by the Bank of Canada and the Fed (Financial Post) After a short respite from monetary movements, more could soon be on the way. And at least one of them might be “a biggie.” Both the Bank of Canada and the U.S. Federal Reserve will meet in the coming days and weeks to deal with some unfinished business. For Governor Stephen Poloz and his monetary team, the issue is whether the Canadian economy can embrace another rate hike after the July ice-breaker – the first increase in seven years.

Overnight markets 

Overview: US 10yr note futures are up 0.321% at 126-23, S&P 500 futures are down -0.24% at 2468.25, Crude oil futures are up 1.54% at $48.02, Gold futures are up 0.45% at $1336.4, DXY is down -0.16% at 92.487, CAD/USD is down -0.26% at 0.8076.

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