Commentaires

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

Market Update

Treasuries open NY weaker, curves mixed (2/10Y steeper, 5/30Y flatter) after mixed overnight flows in a rangebound market. Bunds declined in moderate volume as did Euro currency, after ECB minutes show ECB concern about Euro strength. Treasuries hold a tight range despite lower initial weekly jobless claims, but also amid softer Philly Fed business activity index. Initial unemployment claims -12k to 232k in August 12 payrolls survey week, below the 240k level expected. Claims were at a level of 234k in the July 15 survey week, so there was little change between mid-July and mid-August. The 4-wk moving avg -500 to 240,500, a third straight decline.Canada Jun manufacturing sales -1.8% vs -1.2% expected, largest drop since Nov’14. Vol -1.0%. New orders -3.0%; unfilled ordrs -2.1%. Overall disappointing but comes after 3 mos of gains. y/y gains still strong and 2Q sls still +1.5% q/q (vol +0.5%).

News headlines 

Euro, Stocks Drop Before ECB Minutes; Bonds Gain: Markets Wrap (Bloomberg) The euro fell against most of its major peers while European shares drifted lower before the region’s central bank releases minutes of its last policy meeting. Gold edged closer to $1,300 an ounce and the British pound weakened.

Oil steady as high U.S. output balances crude stock draw (Reuters) Oil prices steadied on Thursday after U.S. data showed a big fall in crude stockpiles but also an increase in production, taking U.S. crude output to its highest in more than two years. Brent crude LCOc1 was unchanged at $50.27 a barrel by 0845 GMT. U.S. light crude CLc1 was 5 cents lower at $46.73.

Britain ‘confident’ of new phase in Brexit talks by October (Reuters) Britain said on Thursday it was « confident » talks with the European Union would move towards discussing their future relationship by October, in contrast to warnings from the top EU negotiator that the target is receding.

North American farmers unite behind NAFTA, supply management spat likened to ‘family fight‘ (National Post) Farmers from Canada, the United States and Mexico are showing a united front and downplaying irritants as negotiators begin a rewrite of the North American Free Trade Agreement.

Japan Reports Trade Surplus in July as Exports Rise Again (Bloomberg) Japan posted a trade surplus for a second consecutive month in July as exports continued to grow. Imports surged again, the latest sign that domestic demand is recovering. The July data offer an early look at how trade might affect the Japanese economy in the current quarter.

Fed’s Fischer says move to unwind bank regulation ‘dangerous’: FT (Reuters) Efforts by the United States government to loosen regulations on banks are « dangerous and extremely short-sighted », one of the U.S. central bank’s top policymakers said in an interview with the Financial Times published late on Wednesday.

Overnight markets 

Overview: US 10yr note futures are down -0.086% at 126-13, S&P 500 futures are down -0.24% at 2461.5, Crude oil futures are down -0.38% at $46.6, Gold futures are up 0.66% at $1291.4, DXY is up 0.36% at 93.878, CAD/USD is up 0.04% at 0.7922.

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 lower, 10Y 2.275 (+0.5bps), TY futures in narrow 5 tick range on avg. volume. Equities firmer (eminis +4),  gold lower for third day, crude 47.70 +0.30% after API reported US crude inventories fell 9.2mln bbls. Core Euro bonds lower, underperforming tsys by 2.5-3bps in 10s. UK gilt curve 2bps steeper, 10Y 1.12%. UK employment came in stronger, unemployment fell to 4.4% and wages rose 2.1% still lagging inflation by 0.5%. Bunds lower, 10Y 0.454% (+2.6bps), giving back the brief bounce after Draghi was said not to deliver any policy changes at the upcoming Jackson Hole symposium. GOCs lower in line with tsys, curve unch, longs lagging with $1.2bln long bond auction at noon,  what should be the last reopening of the Dec 48s considering outstanding will reach $14.5bln. Provis closed relatively unch on no issuance, CMB 10Y pricing this morning ~44.5, WI 44.4/43.5. Apple (Moody’s Aa1) priced its inaugural maple issue yest – $2.5bln 7Y with orders in excess of $3.5bln, spd 81.4, opened 82/80.

News headlines 

Growth Outlook Boosts Europe Stocks; Dollar Steady: Markets Wrap (Bloomberg) European stocks advanced amid growing optimism over the region’s economy. The dollar and Treasuries were largely steady as investors tread water before the release of the latest Federal Reserve minutes.

Oil edges up on falling U.S. crude stocks (Reuters) Oil prices edged up on Wednesday, lifted by declining U.S. crude inventories, although markets were still restrained by excess supply.

UK unemployment falls again to lowest since 1975, wage growth still muted (Reuters) Britain’s labor market outperformed tepid growth in the rest of the economy in the second quarter as the unemployment rate unexpectedly fell to its lowest since 1975, official data showed on Wednesday.

Euro zone Q2 annual growth estimate upgraded (Reuters) The economy in the 19 countries sharing the euro currency expanded by more than previously forecast in the second quarter compared to the same quarter in 2016, the European Union’s statistics office Eurostat said on Wednesday.

IMF warns China over ‘dangerous’ growth in debt (TheGuardian) China’s credit-fuelled economic strategy has been branded as dangerous by the International Monetary Fund in a strongly-worded statement warning that its approach risks financial turmoil.

Metro warns of price hikes as labour costs rise (TheGlobeAndMail) Grocers could be forced to raise their prices next year as a result of Ontario’s plan to boost minimum wages, the head of Metro Inc. warns. Montreal-based Metro will work hard to offset the rise in labour costs, but that may not be enough to prevent supermarkets from raising prices, chief executive officer Eric La Flèche said on Tuesday.

Overnight markets 

Overview: US 10yr note futures are down -0.05% at 126-03, S&P 500 futures are up 0.19% at 2468.5, Crude oil futures are up 0.15% at $47.62, Gold futures are down -0.15% at $1277.8, DXY is up 0.09% at 93.938, CAD/USD is down -0.2% at 0.7855.

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