Commentaires

Market Update

US tsys lower for a second day, moving lower still after July retail sales rose 0.6%, core 0.5% – both well above expectations, 10Y closing in on 2.30%, now 2.28% (+6bps).  Empire Manufacturing 25.2 in August vs 10 exp., prices paid 31 vs 21.3, new orders 20.6 vs 13.3. Overnite  tensions defused as NK  said to have put off plans to attack Guam, triggering a rally in risk assets with the USD higher, gold down ~1.0% &  Euro equities up 0.40%.  Long tsys also pressured by Amazon announcing its 7 part bond offering to fund all/most of its $13.7bln purchase of Whole Foods. Moody’s  has assigned a Baa1 rating to Amazon saying the deal would be ‘credit positive’ according to an article in MW. GOCs lower in mostly in line with tsys except in 10s which are ~1bp wider, 2s10s 4bps steeper, 10Y 1.94% (+7bps). Little change in any of the long rolls (48/45 -2.6, 45/41 1.6) before tomorrows $1.2bln Dec 2048 auction –  at 2.38% thirty year yields are ~25bps higher than at the last long auction on May 17th.

News headlines 

Dollar Extends Gain as Havens Slump; Bonds Decline: Markets Wrap (Bloomberg) Traditional haven assets including gold and the yen slumped and bonds across Europe declined with Treasuries as the prospect of war between the U.S. and North Korea receded. The dollar extended its advance, while European stocks struggled for traction following Monday’s strong gains.

North Korea’s Kim holds off on Guam missile plan; Seoul says will prevent war (Reuters) North Korea’s leader has delayed a decision on firing missiles towards Guam while he waits to see what the United States does next, the North’s state media said on Tuesday, as South Korea’s president said Seoul would seek to prevent war by all means.

Oil slips on strong dollar, OPEC and China weigh (Reuters) Oil prices slipped on Tuesday, extending a heavy sell-off after a surge in the dollar and weighed down by signs of weaker demand in China, the world’s second-largest consumer. Benchmark Brent crude LCOc1 was down 30 cents at $50.43 a barrel by 1050 GMT. U.S. light crude CLc1 was 20 cents lower at $47.39.

Solid German growth gives Merkel election tailwind (Reuters) Strong household and state spending consolidated Germany’s role as the euro zone’s growth engine in the second quarter, helping Chancellor Angela Merkel to burnish her economic credentials less than six weeks before an election.

UK inflation holds steady in July as price pressures ease (Reuters) British consumer price inflation unexpectedly held steady last month as fuel prices fell amid other signs that the squeeze on households’ spending power may slowly be starting to level off. Official figures on Tuesday showed the pace at which manufacturers’ raw material costs are rising slowed by the most in over five years as the initial impact of June 2016’s vote to leave the European Union dropped out of annual comparisons.

Three More CEOs Turn Backs on Trump as Merck, Intel Quit Council (Bloomberg) Could America’s first CEO president lose America’s CEOs? It was a question that came to the fore again Monday when first Merck & Co.’s Kenneth Frazier, then Under Armour Inc.’s Kevin Plank and Intel Corp.’s Brian Krzanich stepped down from a White House business group set up to advise Donald Trump.

What to Expect From Nafta 2.0 Negotiations: QuickTake Scorecard (Bloomberg) Sparks could fly when trade negotiators for U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto meet Aug. 16-20 in Washington. Their task: Begin renegotiating the North American Free Trade Agreement.

Overnight markets 

Overview: US 10yr note futures are down -0.395% at 126-02, S&P 500 futures are up 0.23% at 2469.25, Crude oil futures are down -0.9% at $47.16, Gold futures are down -1.29% at $1273.8, DXY is up 0.66% at 94.028, CAD/USD is up 0.33% at 0.7834.

US Economic Data 

Canadian Economic Data

There is no major economic data release 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 weaker, just off lows on moderate volume (254k)  as tensions between the US & North Korea ease, US 10Y  2.217% (+2.8bps). European equities up 1.0%, crude -0.50%, gold weaker (-6,1288). Core Euro bonds lower , German bund curve ~5bps steeper , 10Y 0.42%, giving back 3bps of last week’s 8bp rally. Italian debt well bid spds vs bunds ~4bps narrower on report Italian banks NPLs declining due to rapid sales. GOCs lower, underperforming tsys by 0.5bps, 10Y 1.886% (+3.6bps). The data calendar is relatively clear this week, July CPI the highlight on Friday. Provi spreads closed the week 1-2bps wider led by longer maturities with no new issuance, spds opening unch, Ont 27s 70/69 , Ont 48s 81/80.

News headlines 

Stocks Bounce and Havens Drop as Korea Fears Abate: Markets Wrap (Bloomberg) The risk-off mood that gripped markets last week showed signs of easing, with shares in Europe following Asian equities higher and American stock futures advancing as the prospect of a war between the U.S. and North Korea receded. Havens including gold, Treasuries and the yen fell.

Japan second-quarter GDP blows past expectations on robust domestic demand (Reuters) Japan’s economy grew in the second quarter at the fastest pace in more than two years as consumer spending and capital expenditure both rose at the fastest in more than three years, highlighting stronger domestic demand.

Robust China economic growth shows signs of fading in July (Reuters) China’s strong economic growth showed visible signs of fading in July as lending costs rose and the gravity-defying property market cooled, though activity levels generally remained solid, propped up by a year-long construction spree.

Oil prices slip on Chinese demand concerns, rising U.S. activity (Reuters) Oil prices fell on Monday as a slowdown in Chinese refining raised concerns about demand in the world’s second-biggest consumer, while an increase in U.S. drilling capacity could deepen a global supply glut.

Toronto Has More Housing Than You Thought (Bloomberg) When it comes to Toronto’s runaway housing prices, the most important question remains the extent to which speculation is driving demand. Ideally, fundamentals such as demographics and employment are at play, and the price gains reflect natural household growth getting ahead of supply. If that’s true, the market should eventually stabilize once new supply kicks in.

Delta Memo Signals Plan for New Bombardier Jet in L.A., New York (Bloomberg) Delta Air Lines Inc. is eyeing New York and Los Angeles as the main bases for Bombardier Inc.’s new jetliner next year, offering a glimpse of how carriers can add service economically with the midsize aircraft.

Overnight markets 

Overview: US 10yr note futures are down -0.197% at 126-18, S&P 500 futures are up 0.56% at 2453.75, Crude oil futures are down -0.45% at $48.6, Gold futures are down -0.42% at $1288.6, DXY is up 0.26% at 93.308, CAD/USD is up 0.17% at 0.7874.

US Economic Data

There is no major economic data release for today.

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 higher after weaker than exp July CPI & core CPI – both 0.1% vs exp 02%,  US 10Y 2.19% (-1.7bps). Tokyo closed for holiday. In Europe tsys lagged bunds which are 2-3bps lower, 10Y bund 0.38% lowest since June 28th.  European equities lower for a third day, S&P futures extending gains after CPI, gold higher for a third day, 2% this week on geopolitical risks & low inflation. GOCs lower, spds ~2bps wider vs tsys, 10Y 1.854% (+0.7bps). Provincials closed 1-1.5bps wider yest on risk off, Ont 27s 70/69.5 , 1bp wider on the week on little trade.

News headlines 

Stock Selloff Deepens on Korea Tension; Oil Slides: Markets Wrap (Bloomberg) European stocks tumbled to a five-month low as volatility soared amid rising tensions over North Korea’s nuclear program. The dollar edged stronger as investors awaited the release of U.S. inflation data.

IEA says strong oil demand growth helping market rebalance (Reuters) World oil demand will grow more than expected this year, helping to ease a global glut despite rising production from North America and weak OPEC compliance with output cuts, the International Energy Agency said on Friday.

Bank of England’s Saunders sees growth holding up: Evening Standard (Reuters) Britain’s economy is likely to hold up despite uncertainty about Brexit, and the jobless rate will probably fall further, according to one of the two Bank of England policymakers who are pushing to raise record-low interest rates.

China should be neutral if North Korea fires first on U.S.: Global Times (Reuters) China should remain neutral if North Korea launches an attack that threatens the United States, a Chinese state-run newspaper said on Friday, sounding a warning for Pyongyang over its plans to fire missiles near the U.S. Pacific territory of Guam.

Telus signs up 99,000 new postpaid wireless customers in Q2 (BNN) Telus Corp, one of Canada’s biggest telecom companies, reported a smaller-than-expected profit on Friday, as higher costs and weak growth in its wireline unit offset gains from its national wireless business

Magna posts 2.5% rise in sales on higher demand (BNN) Canadian auto parts maker Magna International Inc (MG.TO) (MGA.N) reported a 2.5 per cent rise in quarterly sales, helped by higher demand. Net income attributable to Magna rose to US$561 million, or US$1.48 per share, in the second quarter ended June 30, from US$558 million, or US$1.41 per share, a year earlier.

Overnight markets 

Overview: US 10yr note futures are up 0.062% at 126-21, S&P 500 futures are up 0.12% at 2440.5, Crude oil futures are down -0.33% at $48.43, Gold futures are up 0.49% at $1296.4, DXY is down -0.39% at 93.04, CAD/USD is down -0.43% at 0.7881.

US Economic Data 

 Canadian Economic Data

There is no major economic data release 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