Commentaires

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

Market Update

US tsys slightly higher, with some follow thru FTQ bid following the terror attacks in Barcelona yest & continued US political jitters with rumours of Cohn resignation, US 10Y 2.187%. Average volume in TY futures, with price approaching 127-00 high from June 15th European stocks lower, S&P futures flat, crude slightly higher , gold reaching a new high since Nov above 1,298.   Core EGBS are higher, outperforming tsys, with long German debt leading, peripheral spreads ~1bp wider.  Large 2s5s flattener in futures has given the German bund curve a flattening bias.  GOCs  underperforming after July CPI   rose  1.3% in the core vs 1.2% in June . Provis closed 1-1.5bps wider yest, opening unch.

News headlines 

Markets on Edge Before U.S. Open; Gold, Yen Gain: Markets Wrap (Bloomberg) Markets are balanced on a knife edge as the U.S. opening looms after the S&P 500’s second-biggest selloff this year. Stocks in Europe extended declines after a terrorist attack in Barcelona added to unease about U.S. policy paralysis and lingering tensions over North Korea. Airlines and hotels led the decline of the Stoxx Europe 600 index along with banks, as industries across the board got caught in the downturn. S&P futures were flat, signaling U.S. markets may steady after the underlying index plunged 1.5 percent Thursday. Traditional havens including gold and yen gained with core bonds across the euro region, and the dollar weakened.

China July new home prices rise 0.4 pct m/m, 9.7 pct y/y (Reuters) Average new home prices in China’s 70 major cities rose 0.4 percent in July from the previous month, slowing from June’s 0.7 percent growth as policymakers worked to cool an overheated market. Compared with a year ago, new home prices rose 9.7 percent in July, slowing from a 10.2 percent gain in June, Reuters calculated from National Bureau of Statistics (NBS) data out on Friday.

Oil nudges higher on tightening supplies, weak dollar (Reuters) Oil prices edged higher on Friday, with investors offered some encouragement from data hinting that oversupply was easing steadily and a weaker dollar. But prices were still on track to close the week 2 to 3 percent lower after concerns about weaker Chinese oil demand weighed earlier in the week.

Energy Capital Is Said to Plan $5.5 Billion Calpine Takeover (Bloomberg) Private equity firm Energy Capital Partners has reached an agreement to buy U.S. power generator Calpine Corp. for $5.5 billion in cash, people familiar with the matter said. Energy Capital may announce the takeover as early as Friday, the people said, asking not to be identified because the information isn’t yet public. Calpine investors would get $15.25 a share as part of the deal, which is valued at more than $17 billion including debt, they said.

Dry Spell Has Canadian Wheat Harvest Headed for Six-Year Low (Bloomberg) It’s been so dry on Levi Wood’s Saskatchewan farm, his 4,500 acres of durum-wheat plants are six inches (15 centimeters) shorter than last year. A little more than an inch of rain fell during the entire growing season — a fraction of normal — and he expects yields will drop by as much as a third this harvest.

Overnight markets 

Overview: US 10yr note futures are up 0.099% at 126-27, S&P 500 futures are up 0.13% at 2432.75, Crude oil futures are up 0.3% at $47.23, Gold futures are up 0.77% at $1302.4, DXY is down -0.08% at 93.543, CAD/USD is down -0.2% at 0.7901.

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