Commentaires

Market Update

US tsys lower, yield 0.5 – 2bps higher across the curve, 10Y 2.133 (+1.6bps) before August Non-Farm Payrolls, ISM Man.  Below avg volume in TY futures overnight (230k), Sep/Dec roll done, quiet trading ahead of NFP.  Consensus is for a rise of 180k after July 209k increase, yet August seasonality tends to bias the figure lower reflecting back-to-school, lower summer response rates. Weakness in August tends to be revised higher the following months.  Core Euro bonds lower, 10 bund 0.38% (+2.5bps), French OATs lower after auction announcement for next Thursday, more duration than was expected. GOCs opening lower, flatter for second day after blowout Q2 GDP release, curve another 2bps flatter this morning on top of 2bps yest, longs outperforming,10s30s ~3bps narrower yest as longs were bid most of the session following GDP.  Provis opening unch after closing 0.5bps tighter yest on month end buying.

News headlines 

European Shares Climb With Metals Before Jobs Data: Markets Wrap (Bloomberg) European shares advanced, with mining companies extending gains as industrial metals continued a rally fueled by positive economic data surprises this week. The dollar and Treasuries were steady as investors await a U.S. jobs report for clues on the Federal Reserve’s policy-tightening path.

U.S. job growth likely slowed in August; wages seen tepid (Reuters) U.S. job growth likely slowed in August after two straight months of robust gains, but the pace of increase should be more than sufficient for the Federal Reserve to announce a plan to start trimming its massive bond portfolio.

Euro zone factory activity rises in August on strong demand: PMI (Reuters) Euro zone manufacturing activity accelerated in August, clocking the fastest rise in export orders since February 2011 despite a strengthening currency, a business survey showed. Along with evidence of slowly-rising pricing power for businesses, the data may bolster confidence in the European Central Bank to make – and go ahead with – plans to reel back its massive asset purchases program later this year.

IEA still sees no need to release oil stocks (Reuters) The International Energy Agency (IEA) still sees no need for a coordinated international release of oil stocks after Hurricane Harvey disrupted a large chunk of U.S. refining and some production facilities, it said on Friday.

Oil Firms That Cheered Regulatory Rollback Are Quaking on Nafta (Bloomberg) The Trump administration is easing environmental regulations and opening up territory for drilling as part of the president’s bid to unleash the « vast energy wealth » of the U.S. Yet Donald Trump’s push to rewrite the North American Free Trade Agreement could have the opposite effect.

Want an investment with a 10% return or a $600K salary? Surprise, property in Vancouver still your best bet (Financial Post) In the spring of 2012, Dustan Woodhouse, then a 40-year-old Vancouver mortgage broker, broke the cardinal rule of saving for retirement: he liquidated his retirement fund, took the tax hit and plowed the rest into the local real estate market.

Overnight markets  

Overview: US 10yr note futures are down -0.025% at 126-31, S&P 500 futures are up 0.23% at 2475.75, Crude oil futures are down -0.15% at $47.16, Gold futures are up 0.28% at $1325.9, DXY is down -0.08% at 92.59, CAD/USD is down -0.31% at 0.8036.

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 Treasuries open NY lower, with 2/30Y and 5/30Y flatter after overnight consolidation followed Tuesday safe-haven bid gains tied to N.Korea firing of missile over Japan. US ADP sees 237,000 for August Private Payrolls. Risk-on mood means European equities firmer, as are US stock index futures. 2Q GDP rev up to +3.0% SAAR (expected +2.7%) from +2.6% in the advance estimate on strong upward revisions to PCE (both goods and services) and nonresidential fixed investment.

News headlines 

Stocks Rebound as Korean Fears Abate; Gold Steady: Markets Wrap (Bloomberg) European stocks followed most Asian equities higher as tensions surrounding North Korea eased. The yen dropped as demand for safe-haven assets began to fade, although gold and the Swiss franc held Tuesday’s gains.

Crude slips, gasoline jumps as storm shuts a fifth of U.S. fuel output (Reuters) Crude oil slid and gasoline futures hit their highest since mid-2015 on Wednesday as flooding and damage from Tropical Storm Harvey shut over a fifth of U.S. refineries, curbing demand for crude while raising the risk of fuel shortages.

North Korea launch increases focus on risky U.S. shootdown option (Reuters) North Korea’s firing of a ballistic missile over Japan could increase pressure on Washington to consider shooting down future test launches, although there is no guarantee of success and U.S. officials are wary of a dangerous escalation with Pyongyang.

Dollar Rebound Threatens Euro’s Jackson Hole Breakout Level (Bloomberg) The Bloomberg Dollar Spot Index extended its Asia session gain with investors continuing to unwind their short dollar exposure across the board as the gauge rebounded from its lowest level since January 2015.

Euro-Area Economic Confidence Jumps to Decade-High (Bloomberg) Euro-area economic confidence rose to the highest level in a decade as European Central Bank policy makers prepare for a discussion next week about whether and how to pare back stimulus.

CMHC says new mortgage rules are shrinking the size of the insured housing market (Financial Post) Canada Mortgage and Housing Corp., the crown corporation that is the largest mortgage default insurer in the country, is paying Ottawa a $240 million dividend.

Overnight markets 

Overview: US 10yr note futures are down -0.16% at 126-32, S&P 500 futures are down 0% at 2447, Crude oil futures are down -0.78% at $46.08, Gold futures are down -0.45% at $1313, DXY is up 0.46% at 92.673, CAD/USD is up 0.43% at 0.7958.

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 sharply higher on geopol risk after North Korea missile launch, US 10Y  2.105% (-5.2bps) ,  core Euro bonds also sharply higher on risk off, German bunds lagging the rally in gilts after a technically uncovered German Schatz auction.   In Canada, GOCs are higher, in line with tsys except in longs which are lagging by 1bp, curve 1bp steeper 10s30s @ 44.5.  The BOC will auction $750mln in Dec 2064 bonds at noon , followed by 2Y auction tomorrow –  $3.9bln in reopened Nov 19s (second auction of Nov 19s). The 64/48 is quoted @ -3.5/-4.0  which is 0.5bps richer than yest but in line with the -3bp average over the past yr. Provis opening another 0.5bps wider after closing 0.5bps weaker yest, Ont 48s traded 83.5, Ont 27s 72.5.  QC 48s 84/83 las trade 82.5 yest.  Alberta rumoured yest, could come this morning before ultra auction at noon.

News headlines 

North Korea Fires Missile Over Japan, Renewing Tensions in Asia (Bloomberg) North Korea fired an unidentified ballistic missile over Japan on Tuesday, rattling Asian markets as the U.S. and its allies weighed a response to Kim Jong Un’s latest provocation. The missile landed in the Pacific Ocean about 1,200 kilometers (745 miles) east of Japan’s northern island of Hokkaido, Chief Cabinet Secretary Yoshihide Suga told reporters. South Korean President Moon Jae-in ordered a show of force in response, with four F-15K jet fighters conducting bomb-dropping drills.

Oil prices dip as market grapples with hurricane damage (Reuters) Crude prices dipped on Tuesday as the market grappled with the shutdown of some 13 percent of refining capacity in the United States after a hurricane ripped through the heart of the country’s oil industry. The refinery closures helped push U.S. gasoline futures RBc1 to a two-year high of $1.7799 per gallon on Monday, although they had receded to $1.7078 by 0957 GMT on Tuesday.

Canadian oil producers and consumers set to feel Harvey’s wrath (Financial Post) Canadian oil producers and consumers are set to be lashed by the powerful storm that has battered Houston and the wider Gulf Coast region, a key oil and natural gas refining and processing hub.

Gold Is Shaken by a Mysterious 2 Million-Ounce Trade (Bloomberg) After weeks of relative slumber, gold traders were rudely awoken to a surge in volume and volatility. In a span of one minute, gold futures contracts equaling more than 2 million ounces traded — about 20 minutes before Federal Reserve Chair Janet Yellen was to address a gathering of policy makers in Jackson Hole, Wyoming.

Scotiabank joins peers with dividend hike as profit rises (TheGlobeAndMail) Bank of Nova Scotia hiked its dividend by nearly 4 per cent as third-quarter profit climbed faster than expected. Canada’s third-largest lender by assets reported profit of $2.1-billion for the quarter that ended July 31, up 7 per cent from $1.96-billion a year ago.

Bank of Montreal quarterly earnings beat expectations (TheGlobeAndMail) Bank of Montreal, Canada’s fourth-biggest lender, on Tuesday reported third-quarter earnings which were ahead of expectations, driven by strong growth from its Canadian retail and wealth management businesses.

Overnight markets 

Overview: US 10yr note futures are up 0.381% at 127-16, S&P 500 futures are down -0.61% at 2428.75, Crude oil futures are up 0.06% at $46.6, Gold futures are up 0.97% at $1328, DXY is down -0.41% at 91.826, CAD/USD is down -0.16% at 0.8008.

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