Commentaires

Market Update

Choppy trade by the open, long end rebounds to mildly higher after recent Block sale of -14k TYU 126-00 helped push entire curve to session lows. Some desks report better buying on net. Flow included Asian real$ buying in the short end, Asian real$ selling in the intermediates, credit acct buying out the curve, light fx-tied sales as USD inches higher,deal-tied flow in the mix w/potential large supply from BAT and AAPL, see 0804ET bullet.

News headlines 

Euro Shrugs Off German Data to Bounce; Crude Drops: Markets Wrap (Bloomberg) The euro resumed gains against the dollar even as data showed German industrial production unexpectedly fell in June. Crude dropped as OPEC nations met with their allies.

Oil slides from nine-week highs as market looks to OPEC (Reuters) Oil prices edged lower on Monday, sliding away from nine-week highs, as worries lingered over high production from OPEC and the United States. Global benchmark Brent crude futures LCOc1 were down 60 cents, or 1.14 percent, at $51.82 a barrel at 1113 GMT. They traded as low as $51.56 a barrel earlier in the day.

U.K. Economy Takes a Hit as Consumer Spending Slumps Further (Bloomberg) U.K. consumers cut back on spending for a third month in July as house-price growth slowed sharply, dealing yet another blow to the economy. The broad-based weakness is being blamed on a squeeze on pockets as inflation outpaces wage growth as well as concerns about the health of the economy.

Brexit negotiations have not begun well for UK, says former top diplomat (Reuters) Britain’s negotiations over leaving the European Union have not begun well due to disagreements among Prime Minister Theresa May’s team of ministers about the kind of deal they should be seeking, a former top British diplomat said.

German industrial output drops in June, up in second quarter (Reuters) German industrial production unexpectedly fell for the first time this year in June, data showed on Monday, though it increased in the second quarter overall. Output declined by 1.1 percent on the month after rising 1.2 percent in May, the Economy Ministry data showed. Expectations in a Reuters poll were for a 0.2 percent gain.

Swiss exporters cheer as more franc weakness on cards (Reuters) Swiss exporters may carry on benefiting from a relatively weak Swiss franc for some time, with economic, monetary and technical factors all suggesting the currency’s descent against the euro has further to run.

Overnight markets 

Overview: US 10yr note futures are down -0.012% at 126-02, S&P 500 futures are up 0.09% at 2474.25, Crude oil futures are down -1.15% at $49.01, Gold futures are down -0.17% at $1262.5, DXY is down -0.11% at 93.44, CAD/USD is up 0.23% at 0.7887.

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 moving higher after rangebound session, US 10Y 2.24(-3bps) reacting to BOE 6-2 decision to leave rates unchanged, UK gilts 5-6bps lower across the curve, chance of rate hike in Nov at 36.5% vs 47.5% prior to announcement, GBP down 0.67%. Carney did mention that further tightening was needed at some point, yet the mkt more focused on the downgrading to growth – 1.7% this year vs. 1.9% May forecast, 2018 lowered to 1.6% from 1.7% and 2019 unch at 1.8%. The Bank also said real wages will decline by 0.5% this yr.  In Canada, GOCs higher, 10Y 1.915%, close to yesterday morning’s 1.91% low, spreads ~1bp wider vs tsys. Provis opening  unch after closing 1bp tighter yest., Ont 27s 68/67.5 – reopened at 68 yest.

News headlines 

Europe Stocks Struggle as Euro Slips, Pound Falls: Markets Wrap (Bloomberg) European equities struggled for traction, erasing first a decline and then an advance as the recent run of positive earnings continued and the euro pared some of Wednesday’s jump. The dollar was firmer as traders await U.S. labor-market data.

BOE Cuts Growth Forecasts as Rate Kept at Record Low (Bloomberg) The downgrades, linked to Brexit, were enough for the majority of the Monetary Policy Committee to keep their cautious stance, with the vote for no change coming in as expected at 6-2. Ian McCafferty and Michael Saunders maintained their push for a 25 basis-point increase, which would reverse the rate cut put in place a year ago this week.

Hedge fund short covering lifts oil prices: Kemp (Reuters) In recent weeks short covering, rather than long building, has driven oil prices higher, which suggests fund managers are becoming less bearish about prices rather than more bullish. Hedge funds and other money managers continued to reduce their short positions in crude and refined fuels in the week to July 25, pushing prices higher.

Investor Einhorn sees cash burn at Tesla, sticks with short bet (Reuters) Billionaire investor David Einhorn, who has been hurt by his bet against Tesla Inc, said on Tuesday that the electric car maker is over-valued and that the company is not adequately capitalized.

S&P says new U.S. sanctions have no immediate impact on Russia’s ratings (Reuters) The new round of U.S. sanctions against Moscow has « no immediate implications » for Russia’s sovereign credit ratings, S&P Global Ratings said on Thursday.

Toronto Home Prices Suffer Worst Monthly Decline in 17 Years (Bloomberg) Home prices in Canada’s largest city posted their biggest monthly drop in at least 17 years in July and sales plunged as government efforts to cool the market and the near-collapse of a mortgage lender made buyers leery.

Overnight markets 

Overview: US 10yr note futures are up 0.112% at 126-07, S&P 500 futures are down -0.04% at 2472.5, Crude oil futures are up 0.44% at $49.81, Gold futures are down -0.36% at $1273.8, DXY is up 0.07% at 92.901, CAD/USD is up 0.19% at 0.794.

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 volatile after July ADP +178k vs 190k exp (June revised to 191k from 158k) and  tsy refunding announcement – $62bln in 3, 10 & 30Y notes as expected, notably the Treasury made no mention of ultra-long bonds in the statement which is giving the mkt a bit of a lift – 30K TY lifted from 126-00 to 126-04, as flatteners  being put on according to MNI. GOCs lower , spds another 1-2bps tighter vs tsys after yesterday’s strong outperformance (2-3bps) led by the 7 to 10Y on strong buying in CGBs, provis opening unch in 5s, 0.5bps wider in 10s & longs

News headlines 

Commodity Dip, Euro Gain Hit Stocks; Gold Drops: Markets Wrap (Bloomberg) Miners weighed on Europe’s benchmark equity index as most industrial metals traded lower and a surge in the euro added a further headwind. Oil fluctuated after retreating from its brief rise above $50 a barrel.

Euro hits 2-1/2 year highs as warning signs grow (Reuters) The euro climbed to a fresh 2-1/2 year high against the dollar on Wednesday as investors added long bets in the single currency though some analysts advised caution as some signals such as interest rate differentials were flashing a warning sign.

Trump close to decision on addressing Chinese trade practices (Reuters) U.S. President Donald Trump is close to a decision on how to respond to what he considers China’s unfair trade practices, a senior Trump administration official said on Tuesday.

China issues rules to curb state firms’ overseas investment risks (Reuters) China’s finance ministry has issued guidelines on overseas investment of state-owned enterprises (SOEs), amid a campaign to tighten controls on outbound investment and financial risks.

Barclays leases more office space in Dublin ahead of Brexit (Reuters) Barclays (BARC.L) has signed a lease agreement for more office space in Dublin as the bank prepares to expand its operations in the Irish capital to cope with the impact of Britain’s exit from the European Union.

In Canada, a nation of realtors braces for the end of the boom (Reuters) Canada’s long housing boom has drawn thousands into the sector, from realtors and home stagers to construction workers, and a looming slowdown threatens to trigger an exodus that could wipe out many of those jobs and force the economy to shift down.

Overnight markets 

Overview: US 10yr note futures are down -0.136% at 126-01, S&P 500 futures are up 0.1% at 2474.75, Crude oil futures are down -0.12% at $49.1, Gold futures are down -0.79% at $1269.3, DXY is up 0% at 93.047, CAD/USD is up 0.23% at 0.7957.

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