Commentaires

Market Update

US tsys trading weaker, yields ~1bp higher curve 0.5bps steeper, US 10Y 2.175%, heavy volume in TY futures (>400k) mostly Sep/Dec roll. Equities basically unch in Europe, London on holiday, S&P futures +1.5, gold higher, WTI crude weaker (47.50 -0.35). Heavy auction calendar with the US selling $26bln in 2Y & $34bln in 5Y notes today.  Yet IG issuance expected to be quiet with Europe on holiday and in lead up to Labour Day holiday. German bunds mixed, bund curve steeper with longer maturities ~1bp higher in yield.  Yellen & Draghi’s lack of insight on monetary policy direction has kept the USD on the backfoot vs the euro, thou this week’s heavy data calendar including non farm payrolls Friday could change perceptions for future fed policy, considering that odds of a Dec rate hike have faded since July from over 50% to 30%.  In Canada, GOCs are lower in line with tsys, Q2 GDP the highlight this week scheduled for Thursday, with expectations of a solid 3.5-4.0% gain on top of Q1 3.7% increase.  On Tuesday the BOC auctions $750mln in ultra long bonds, reopening of the Dec 1 2064s – the roll at -3.5/-4.0bps vs Dec 48s has cheapened by ~1bp since mid August.

News headlines 

Europe Stocks Drop on Euro Strength; Dollar Steady: Markets Wrap (Bloomberg) European stocks started the week firmly on the back foot, with every sector retreating following Friday’s euro surge. U.S. equity futures and the dollar struggled and gold rose as investors weighed the damage from Tropical Storm Harvey.

Oil markets roiled as Harvey hits U.S. petroleum industry (Reuters) Oil markets were roiled on Monday after Tropical Storm Harvey wreaked havoc along the U.S. Gulf Coast over the weekend, crippling Houston and its port, and knocking out several refineries as well as some crude production.

China says sanctions won’t help as Trump targets Venezuela (Reuters) Venezuela’s close ally China said on Monday that history shows external interference and unilateral sanctions only make things more complex and will not help resolve problems, after the United States imposed new sanctions on Venezuela.

Don’t count on Canada’s over-the-top economic growth continuing for much longer (Financial Post) Blink and you may miss it, but the beginning of the end of over-the-top economic growth is just around the corner. That might sound alarmist, but most economists and policymakers are setting the stage for a weaker performance in the second half of 2017 and beyond.

Central Bankers Shun Policy Clues as Trade Pervades Jackson Hole (Bloomberg) Leaders of the world’s most powerful central banks defended post-crisis reforms at their annual retreat in Jackson Hole, Wyoming, while discussing the causes and consequences of populist waves that have reshuffled the political order in the U.S. and Europe.

Cohn or Yellen? Bond Traders Say Same Difference (Bloomberg) Bond traders are betting that no matter who’s leading the Federal Reserve come February, policy makers won’t stray from the path they’ve been laying out for months. With Janet Yellen coming off what may have been her final address as Fed chair at the central bank’s annual Jackson Hole gathering, investors are starting to look ahead to who might follow her.

Overnight markets 

Overview: US 10yr note futures are down -0.012% at 126-28, S&P 500 futures are up 0.17% at 2446.75, Crude oil futures are down -0.71% at $47.53, Gold futures are up 0.48% at $1304.1, DXY is down -0.33% at 92.438, CAD/USD is down -0.24% at 0.8031.

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 weaker, US 10Y 2.20% after stronger July core Durable Goods Orders (0.5% vs 0.4%) and before Jackson Hole speeches from Yellen (10:00am) and Draghi (3:00pm).   Core European bond yields 1-2 bps lower, heavy selling in German 5Y futures around 6:00am, 14k contracts equivalent to E1.7bln 5Y bonds.  GOCs lower in line with tsys, 10Y  1.90% (+1.5bps), curve 0.5bps steeper 2s10s.  Provis finished unch yest  on light volume, expectations of new issuance weighing on GOCs mid morning. Quebec 48s 1bp wider this week , 81/80 from 80 reopening on Wed, Que/Ont 48 unch @ -1.2bps.

News headlines 

Stocks Rise as Dollar Slides Before Bankers Speak: Markets Wrap (Bloomberg) Stocks advanced as a commodity rally boosted shares of raw-material producers. The dollar slipped against most major peers and bonds declined before Janet Yellen and Mario Draghi speak in Jackson Hole.

Oil up as U.S. rigs and refineries brace for hurricane (Reuters) Oil prices rose on Friday as the U.S. petroleum industry braced for Hurricane Harvey, which may become the biggest storm to hit the U.S. mainland in more than a decade. Harvey became a category 2 storm as it crossed the Gulf of Mexico with winds of 105 mph (169 kph), 220 miles (355 km) off Corpus Christi, Texas, the National Hurricane Center said.

UK consumer morale edges up but gloom over finances deepens: YouGov/Cebr (Reuters) British consumer morale improved slightly in August but remained subdued overall as households became gloomier about their finances, a survey showed on Friday. The monthly consumer confidence index from pollster YouGov and consultancy Cebr rose to 107.6 from 107.2 in July, aided by an increase in its measures of job security and house prices.

Price slump, tight cash wreak havoc in Canada’s top housing market (Reuters) The sharp reversal in Toronto’s home prices has thrown Canada’s biggest property market into chaos, with scores of buyers suddenly short of money and desperate to get out of deals that looked good just a few months ago.

Citi Sees the Sun Rising in Japan Even as Inflation Stays Tepid (Bloomberg) The upbeat chorus for Japan’s economy is growing louder. Spurred by robust second quarter growth, Citigroup Inc. economists led by Willem Buiter have upgraded their 2017 growth forecast from 1.6 percent to 2 percent, « well above the potential growth rate of the Japanese economy. » That’s quite an outlook for an economy finally showing traction after decades of stagnation.

Canada ramps up deportations amid growing migrant influx (Reuters) As an influx of asylum seekers crossing from the United States strains Canada’s immigration system, the country is ramping up its deportation of migrants, government data shows. Deportations of Mexicans, who have flocked to Canada in growing numbers after a visa requirement was lifted in December, was already 66 percent higher in the first eight months of 2017 than the total from the previous year.

Overnight markets 

Overview: US 10yr note futures are down -0.025% at 126-21, S&P 500 futures are up 0.22% at 2446, Crude oil futures are up 0.46% at $47.65, Gold futures are down -0.08% at $1291, DXY is down -0.04% at 93.239, CAD/USD is down -0.08% at 0.7993.

US Economic Data 

Canadian Economic Data

There is no major economic data 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, 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 weaker , yields 1.5 – 2 bps higher, 10Y 2.19 (+2bps), some profit taking after yesterday’s FTQ rally, above average volume in TY1 futures (388k). European stocks are higher, Euro Stoxx +0.40%,  S&P futs +4.5, crude slightly lower 48.15.  Attention shifts to Jackson Hole with Friday spechses from Yellen & Draghi.  The US treasury auctions $14bln in 5Y TIPS at 1PM as well as announcing  next week’s month end 2Y, 5Y & 7Y note auctions at 11:00AM. GOCs lower, outperforming tsys by ~0.5bps with the 10Y 1.89%. Provis finished 1bp wider yest despite strong demand for Quebec long reopening, this morning opening unch – Quebec 48s 81/80 , PQ/Ont 48 -1.4/-1.8.

News headlines 

Dollar, Europe Stocks Firm as Jackson Hole Arrives: Markets Wrap (Bloomberg) Concerns about the Trump administration’s ability to enact its fiscal agenda were put on the back-burner in European trading, as focus turned instead to the start of the central bankers’ meeting in Jackson Hole. The dollar strengthened while stocks in Europe advanced.

Oil steady as storm heads into Gulf of Mexico (Reuters) Oil prices steadied on Thursday, holding on to most of their recent gains after another fall in U.S. crude inventories indicated a tighter market, and as a tropical storm headed towards oil producing facilities in the Gulf of Mexico.

UK shop sales slide unexpectedly in August, retailers’ mood downbeat: CBI (Reuters) British retail sales growth slowed in August at the fastest pace in more than a year as the squeeze on consumers from rising prices continued, according to a survey on Thursday.

Weak pound pushes UK household spending growth to slowest since 2014 (Reuters) British household spending grew at its weakest pace since late 2014 in the three months to June as the effect of a weaker pound since last year’s Brexit vote weighed on Britons’ spending power, official statistics showed on Thursday.

Can Oil Sands Pay Off at Just $50 a Barrel? (Bloomberg) The future is arriving—a few tons at a time—at Suncor Energy Inc.’s North Steepbank oil sands mine in Alberta, Canada. Human-operated excavators scrape away the top layers of soil to get to the hydrocarbon-rich tar sand beneath in much the same way they always have. But now they’re dumping that dirt into driverless trucks that use GPS systems and lasers to find their way through the massive mine.

Sears Sales Slide 11.5% (WSJ) Sears Holdings Corp.’s SHLD -5.09% brick-and-mortar stores continued to lose ground in a tough retail environment, despite the company’s cost-cutting efforts. Sales at stores open at least a year declined 11.5% in the fiscal second quarter as the company scaled back the number of pharmacies and electronic products in its stores. Kmart’s same-store sales fell 9.4%, compared with 3.3% over the same period and Sears same-store sales declined 12.3% compared with a 7% drop last year.

Overnight markets 

Overview: US 10yr note futures are down -0.123% at 126-25, S&P 500 futures are up 0.28% at 2448.25, Crude oil futures are down -0.43% at $48.2, Gold futures are down -0.18% at $1292.4, DXY is up 0.09% at 93.235, CAD/USD is down -0.2% at 0.7982.

US Economic Data 

Canadian Economic Data

There is no major economic data 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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