Commentaires

Market Update

Tsy futures trading weaker, long end underperforming, trailing core EGBs on light volume, as European underpinned by soft flash PMI’s.  The July FOMC statement is the highlight of the week. There should be only modest adjustments to the characterization of the economic backdrop and we expect no change to the policy language. While some have speculated that the Fed could announce the start date of balance sheet run-off in this press statement, we think the committee’s track record makes this highly unlikely. The Fed has been loath to make potentially market-moving decisions in a non-press conference meeting. Accordingly, we think the announcement comes at the September meeting when we also believe the committee will stand pat on rates. Market difficulties interpreting the FOMC statement generally stem from the Fed’s 1-month to 2-month lag in discussing the data. Where Treasury traders still discuss weaker June data released 10 days ago, the FOMC will more likely focus on the second quarter rebound. After the meeting, of course, comes a fresh deluge of Fed speakers to start by the middle of next week.

News headlines 

Euro Halts Advance as Carmakers Weigh on Stocks: Markets Wrap (Bloomberg) The euro headed for its first decline in three days as data showed the region’s economy cooling at the start of a week packed with earnings results and a Federal Reserve rate decision. Stocks were dragged down for a second day by carmakers amid a collusion probe.

Chinese capital shuts major road during rare protest (Reuters) Beijing police shut down part of a major road on Monday as they dealt with a rare protest in the Chinese capital, with demonstrators gathering to complain the government had unfairly accused a company they say helps the poor of pyramid selling.

OPEC Signals No Big Changes to Supply Deal at Russia Meeting (Bloomberg) OPEC and its allies indicated they weren’t planning any big changes to their supply deal, even as oil prices remain below $50 a barrel amid growing skepticism that their output cuts are working.

Oil rises after Saudi vows to cap crude exports next month (Reuters) Oil rallied on Monday, erasing early losses after leading OPEC producer Saudi Arabia pledged to cut its exports to help speed up the rebalancing of global supply and demand. Saudi Energy Minister Khalid al-Falih said his country would limit crude oil exports at 6.6 million barrels per day in August, almost 1 million bpd below levels a year ago.

Japan PM Abe denies favors for friend amid falling support (Reuters) Japanese Prime Minister Shinzo Abe, his ratings sinking over a suspected cronyism scandal, on Monday said he had never instructed officials to give preferential treatment to a long-time friend, adding that the latter had never sought favors.

U.S. venture capital’s digital coin quandary: cash-rich startups (Reuters) U.S. venture capital firms lining up for a slice of the burgeoning digital currency market are grappling with a novel challenge – some of the hottest tech startups that sell the coins just don’t need their money.

Overnight markets 

Overview: US 10yr note futures are down -0.049% at 126-08, S&P 500 futures are down -0.02% at 2469, Crude oil futures are up 0.42% at $45.96, Gold futures are up 0.16% at $1263, DXY is up 0.1% at 93.952, CAD/USD is down -0.16% at 0.7989.

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 hold a tight higher price range in muted summer Friday trading. Meanwhile other overnight flows included light Japanese real money selling in Tsy intermediates. But Japanese accounts generally speaking have been buyers in Treasuries, said traders; and Japanese MOF data showed Japanese accounts bought Y947 Bln (US$8.3B) in foreign bonds in recent week, the 9th net purchase in 11 weeks. Canada May Retail sales +0.6% vs +0.3% expected. Ex autos -0.1% vs flat expected. Ex autos and gas flat. Total sales volume +1.1%. Core sales soft but April were strong.

News headlines 

Euro Advance Persists as Politics Sink Dollar: Markets Wrap (Bloomberg) Bonds gained and the euro headed for its strongest level against the dollar since January 2015 on bets the European Central Bank will start tapering its stimulus program. European stocks fell as the common currency’s rally weighed on carmakers and other exporters.

ECB rate setters see decision on stimulus in October: sources (Reuters) European Central Bank policymakers see October as the most likely date to decide whether to claw back stimulus and consider December, an option flagged by staff, as too late, four sources with direct knowledge of the discussion said.

Bank Profits Near Pre-Crisis Peak in U.S. Despite All the Rules (Bloomberg) The last time big U.S. banks made so much money, the financial world was heading toward the brink of collapse. This time, it’s stiff regulation that’s in danger.

UK public finances suffer inflation hit, adding to Hammond’s headache (Reuters) Britain’s public finances deteriorated in June as rising inflation pushed up the government’s debt bill, driving home the challenge for finance minister Philip Hammond who is under pressure to loosen the public purse strings.

Exclusive: U.S. toughens stance on foreign deals in blow to China’s buying spree (Reuters) A secretive U.S. government panel has objected to at least nine acquisitions of U.S. companies by foreign buyers so far this year, people familiar with the matter said, a historically high number that bodes poorly for China’s overseas buying spree.

Here’s the Chain Reaction Trump Could Set Off by Trying to Fire Mueller (Bloomberg) President Donald Trump’s interview with the New York Times on Wednesday has stirred speculation he may consider firing Special Counsel Robert Mueller for investigating Trump’s business dealings as part of the Russia probe.

 Overnight markets 

Overview: US 10yr note futures are up 0.112% at 126-07, S&P 500 futures are down -0.02% at 2470.75, Crude oil futures are down -0.77% at $46.56, Gold futures are up 0.3% at $1255.8, DXY is down -0.18% at 94.132, CAD/USD is down -0.28% at 0.7964.

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

Tsys break higher out of the range, as more buying coming in, 10-year note is at 2.255%, around session low yields. Tsys see 2/7Y, 2/30Y flattening. – TIPS also doing well, outperforming nominal Tsys in fact for another day, today’s 1pm ET $13B 10Y TIPS auction. Tsys holding near early session highs post data, volume rather light still, some rate paying by props and real$ in long end, fast$ buying 10s so far. Sep Bunds now trading close to level seen before ECB monetary policy decision as markets react to comments from ECB President Draghi. Sep Bund last 18 ticks lower at 161.74

News headlines 

Stocks Trade Near Record Before ECB; Dollar Rises: Markets Wrap (Bloomberg) Central banks were once again front and center in global markets on Thursday, with stocks trading near a record as investors await the ECB’s latest rate decision. The Bank of Japan maintained its mega monetary stimulus, sinking the yen and lending momentum to a dollar advance.

Major central banks to turn up policy heat despite low-burn inflation: Reuters poll (Reuters) Expectations are firming for major central banks to turn further away from ultra-easy monetary policy despite scant evidence of a pickup in inflation, Reuters polls of more than 500 economists showed on Thursday.

China unveils plan to become a world leader in AI by 2025 (Reuters) China unveiled a national artificial intelligence (AI) development plan on Thursday, laying out its ambitions to build world-leading technology amid heightened international friction over applications of AI in military technology.

BOJ pushes back inflation target for sixth time, keeps policy steady (Reuters) The Bank of Japan kept monetary policy steady on Thursday but once again pushed back the timing for achieving its ambitious inflation target, reinforcing views it will lag well behind other major central banks in scaling back its massive stimulus program.

May Urged to Reassure Businesses Over Her Brexit Strategy (Bloomberg) U.K. Prime Minister Theresa May will be urged to do more to reassure businesses about her Brexit plans, as she begins her first serious consultation with companies on the subject more than a year after taking office.

France Says ‘We Want Our Money Back’ as Brexit Talks Crawl On (Bloomberg) France insisted that the U.K. pay a Brexit bill of as much as 100 billion euros ($115 billion), underlining the hurdles to substantial progress in negotiations toward a new relationship with the European Union.

Overnight markets 

Overview: US 10yr note futures are down 0% at 126-02, S&P 500 futures are up 0.1% at 2474, Crude oil futures are up 0.62% at $47.41, Gold futures are down -0.32% at $1238, DXY is up 0.3% at 95.064, CAD/USD is up 0.04% at 0.793.

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