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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

Market Update

US tsys jumping in NY trading as mkts react to Trump’s threat of a govt shutdown should the border wall not be funded, Trump also indicated the US could pull out of NAFTA., US 10Y 2.19 (-2.3bps), curve 1bp flatter. Overnight tsys pressured by stronger Markit Euro PMI, aslo supply from the UK & Germany with the latter selling E3bln of 10Y bonds which was barely covered (E3.086bln). A speech by Maro Draghi yesterday gave no further insight on ECB monetary policy.  Peripherals weaker, 10Y BTP-bund spread another 5bps wider @ 174bps.  In Canada, GOCs are higher in line with the risk off tone in tsys, 10Y 1.885 (-2.6bps).  Five year supply today – $3.9bln in Sep 22s which should become benchmark (out $15.6bln). The Sep 22/Mar 22 roll 4.4/4.3 – the low of the three month range , while the Mar22/Sep21 (5Y) roll has cheapened ~2bps to 6.5bps since the last 5Y auction on July 5th  – so the current 5Y looks relatively cheap on the fly.

News headlines

Euro Gains on Strong Manufacturing Data; Oil Falls: Markets Wrap (Bloomberg) The euro was one of the standout gainers in an otherwise listless day in markets, as strong European data boosted confidence in the region’s growth. Gold and yen benefited as comments from President Donald Trump provoked another bout of investor caution.

Trump Threatens Government Shutdown Over Border Wall Funding (Bloomberg) President Donald Trump threatened Tuesday to bring the U.S. government to the brink of a shutdown if needed to pressure Congress into funding the border wall that was a centerpiece of his 2016 campaign.

Euro perched near day’s highs on PMI data (Reuters) The euro held near the day’s highs on Wednesday, propped up by strong readings on German and French PMI surveys though analysts warned the single currency’s gains could be short-lived due to concerns about heavy one-sided bets.

Oil prices fall on oversupply concern as Libyan output seesaws (Reuters) Oil prices fell on Wednesday, weighed down by concerns about rising production from Libya feeding into an oversupplied market and a surprise increase in U.S. gasoline inventories.

UK employers’ hiring confidence lowest since Brexit vote, say recruiters (Reuters) British employers’ willingness to hire and invest has fallen to its lowest since last year’s vote to leave the European Union, a survey by the recruitment industry showed on Wednesday.

Royal Bank of Canada Follows U.S. Rivals as Trading Declines (Bloomberg) Royal Bank of Canada showed it’s not immune to the trading slowdown that affected U.S. rivals. Revenue from trading at Royal Bank fell 15 percent to C$835 million ($664 million) in the fiscal third quarter, led by declines in fixed income, currency and commodities, the Toronto-based firm said Wednesday in a statement.

Overnight markets 

Overview: US 10yr note futures are up 0.16% at 126-25, S&P 500 futures are down -0.39% at 2443.25, Crude oil futures are down -0.29% at $47.69, Gold futures are up 0.4% at $1296.1, DXY is down -0.29% at 93.276, CAD/USD is up 0.23% at 0.7944.

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, US 10Y 2.206 (+2.4bps), curve ~1bp steeper, US stock index futures higher( emini +6.5), Euro stocks +0.56%.  Core Euro bonds also lower, bunds lagging the decline in tsys by 1bp, supported by the sharp decline in Italian debt, with 10Y BTP ~9bps higher 2.10%, 10Y bund/BTP spd at one-month high.  GOCs sharply lower after July core retail sales +0.7%, GOC 10Y 1.93% (+5.4bps), provis opening unch.

News headlines 

Stocks Rebound in Thin Trading; Gold, Bonds Slide: Markets Wrap (Bloomberg) European stocks joined a rally across most Asian equities following three days of losses, though trading volumes were once again depressed. Havens including gold, the yen and bonds retreated even as the likes of Bridgewater Associates’ Ray Dalio said he was reducing risk.

Oil prices steady ahead of U.S. stocks data (Reuters) Oil prices steadied on Tuesday, supported by signs that global supply may be tightening gradually and restrained by rising U.S. shale production. Benchmark Brent crude LCOc1 was unchanged at $51.66 a barrel by 1120 GMT. U.S. light, sweet crude CLc1 was also unchanged on the day at $47.37.

German economic sentiment drops more than seen (Market Watch) German economic sentiment fell markedly in August, but the general outlook for Europe’s largest economy remains “stable” and relatively solid, the ZEW think tank said Tuesday. The think tank’s measure of economic expectations fell to 10 points from 17.5 points in July, which is below the long-term average of 23.8 points. Economists polled by The Wall Street Journal had forecast a decline to 14.0 points.

UK outlines approach to cross-border legal disputes post-Brexit (Reuters) Britain urged the EU on Tuesday to stick to the existing system for resolving cross-border civil disputes after Brexit, expanding on a list of proposals for future ties to try to nudge talks forward with the bloc.

Japan urges pressure on North Korea, military to seek record defense spending (Reuters) Japan’s new foreign minister Taro Kono said on Tuesday international pressure against North Korea must be maintained until Pyongyang clearly demonstrates that it will give up its nuclear program.

Lithium Is Getting Harder to Extract (Bloomberg) Hidden within the salt flats high in the Andes mountains of South America are vast deposits of the lithium that Elon Musk may need for his electric-car revolution. But extracting the mineral from brine ponds created by Orocobre Ltd. has proved more difficult than expected.

Overnight markets 

Overview: US 10yr note futures are down -0.185% at 126-20, S&P 500 futures are up 0.31% at 2435.5, Crude oil futures are down -0.11% at $47.32, Gold futures are down -0.43% at $1291.1, DXY is up 0.41% at 93.473, CAD/USD is down -0.14% at 0.7974.

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