Commentaires

News headlines

• Commodities Advance, Boosting Miners; European Equities Decline (Bloomberg)  Precious metals led commodities higher, boosting mining stocks, on speculation central banks in some of the world’s leading economies will step up monetary stimulus in the wake of Britain’s decision to leave the European Union.
• K. Construction Shrinks at Fastest Pace Since 2009 on Brexit (Bloomberg) U.K. construction unexpectedly shrank at the fastest pace since 2009 in June as the impending vote on Britain’s European Union membership stymied residential building.
• British government faces legal challenge over Brexit trigger (Reuters) Law firm Mishcon de Reya said it had started legal action to demand the British government win legislative approval from Parliament before triggering a formal divorce from the European Union.
• Oil climbs as market seen in balance, but slow demand weighs (Reuters) Oil prices rose on Monday following comments from the Saudi energy minister that the market was heading towards balance, although signs of slowing demand in Asia weighed.
• Japan firms’ price expectations slide, keep BOJ under pressure (Reuters) Japanese companies’ inflation expectations fell slightly in June from three months ago, the Bank of Japan’s tankan survey showed, adding to growing doubts over its argument that aggressive money printing will accelerate price growth to its 2 Photographer: Andrey Rudakov/Bloomberg
• Russian Oil Exports Set for Record as Europe Competition (Bloomberg) Russian crude exports are on track to set a record this year, which is intensifying competition in Europe as Iran boosts shipments to the region.
• Brazil Economists Forecast Slower Inflation on Stronger Currency (Bloomberg) Brazil economists reduced their 2016 inflation forecast for the first time in seven weeks as they foresee a stronger currency this year and next.

 Overnight markets                                                                                      

• Overview: US 10yr note futures are up 0.0822% at 133-6, S&P 500 futures are up 0.13% at 2099, Crude oil futures are up 0.31% at $49.14, Gold futures are up 1.14% at $1354.3, DXY is down -0.02% at 95.631.

 US Economic Data

• There is no major economic data for today.

 Canadian Economic Data 

• 9:30 AM: RBC Canadian Manufacturing Index, June, (prior 52.1)
• 10:00 AM: BOC Business Outlook Survey, Q2 (prior 16.00)
  •        BOC Senior Loan Officer Survey, Q2 (prior 6.6)

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, recovering from earlier losses which saw the 10Y go above 1.54% after yesterday afternoon selloff, 10Y now 1.51%. GOCs higher, in line with tsys – both tsys/GOCs bid on drop in crude below $49, reversal in European equities. Little reaction to Apr GDP which came in as exp ( 0.1%, 1.5% y/y). Core Euro bonds underperforming with the German yield curve 1bp steeper on better than exp German unemp data & higher Eurozone CPI. JGBs lower, curve 4bps steeper after the BOJ left amt of govt bond purchases for July unch from June at 8-12T yen. Provis narrowed further yest, Ont 48 issue @ 104 closed 102/101, hit at 102 early this morn. Ont 46/26 roll 13/12.5 3bps wider over the week.

News headlines

• World stocks poised for worst month since January (Reuters) European stocks and the pound held on to a third day of gains as the immediate market flurry over Britain’s vote to pull out of the European Union settled. The rebound was not enough, however, to offset the sharp losses suffered in the aftermath of last week’s vote which have put global stocks on track for their worst monthly performance since January.
• Exclusive: China to tolerate weaker yuan, wary of trade partners’ reaction – sources (Reuters) China’s central bank is willing to let the yuan fall to 6.8 per dollar in 2016 to support the economy, which would mean the currency matching last year’s record decline of 4.5 percent, policy sources said. The yuan is already trading at its lowest level in more than five years, so the central bank will aim to ensure a gradual decline for fear of triggering capital outflows and criticism from trading partners such as the United States, said government economists and advisers involved in regular policy discussions.
• China central bank criticizes media for publishing ‘inaccurate information’ on yuan rate (Reuters) China’s central bank criticized the media on Thursday, saying some media continuously publish « inaccurate information » on the yuan foreign exchange rate, which help some « speculative forces » short the yuan. Recent media reports on the yuan interrupt normal operation of the foreign exchange market, the People’s Bank of China said in a notice on its website, adding that China does not intend to compete in international trade by depreciating the yuan.
• German economy’s domestic strength seen cushioning Brexit fallout (Reuters) German retail sales rose in May and unemployment fell further in June as upbeat consumers and local firms drive growth in Europe’s largest economy, where the renowned engineering sector sees no immediate impact from the ‘Brexit’ vote. Economists have warned that Britain’s decision to leave the European Union is likely to hit German exports and reduce growth by as much as half a percentage point next year.
• Soros Says Brexit Has ‘Unleashed’ a Financial-Markets Crisis (Bloomberg) Britain’s decision to leave the European Union has “unleashed” a crisis in financial markets similar to the global financial crisis of 2007 and 2008, George Soros told the European Parliament in Brussels. “This has been unfolding in slow motion, but Brexit will accelerate it. It is likely to reinforce the deflationary trends that were already prevalent,” the billionaire investor said on Thursday.
• Bell Canada loses second attempt to limit competitor access to its fibre networks (Reuters) Canada’s telecom regulator quashed Bell Canada’s second attempt to make it harder for competitors to buy wholesale access to its high-speed networks, a decision that will enable indie Internet providers to buy and resell access to ultra-fast fibre Internet connections. In a decision released Wednesday, the Canadian Radio-television and Telecommunications Commission (CRTC) denied Bell’s application to place restrictions on which companies could buy access to its disaggregated wholesale high-speed service. The ruling means any service provider — typically those without enough cash to lay fibre themselves — will be able to purchase access to the expensive new fibre networks that connect directly to consumers’ homes.
• Taiwan’s central bank cuts rates for fourth time to revive economy (Reuters) Taiwan’s central bank trimmed interest rates for the fourth consecutive meeting on Thursday, saying fiscal stimulus and economic restructuring were also needed to revive the economy. The widely expected rate cut comes a week after Britain voted to leave the European Union, setting off unprecedented market volatility and clouding global growth prospects that will likely be a drag on Taiwan’s technology sector.                                         

Overnight markets     

Overview: US 10yr note futures are down -0.1761% at 132-27, S&P 500 futures are up 0.02% at 2067.25, Crude oil futures are down -1.98% at $48.89, Gold futures are down -0.38% at $1321.8, DXY is down -0.03% at 95.736.                                                                                                                         

US Economic Data

• 8:30 AM: Initial Jobless Claims, June 25, 268k, est. 267k (prior 259k, 258k)
  •      Continuing Claims, June 18, 2120k, est. 2151k (prior 2142k, 2140k)
• 9:45 AM: Chicago Purchasing Manager Index, June, est. 51.0 (prior 49.3)
  •       Bloomberg Consumer Comfort Index, June 26,  (prior 49.3)

Canadian Economic Data

•  8:30 AM :  GDP, m/m, April, 0.1%, est. 0.1% (prior -0.2%)
  •         GDP, y/y, April, 1.5%, est. 1.4% (prior 1.1%, revised 1.2%)
  •         Industrial Product Price, m/m, 1.1%, est. 0.3% (prior -0.5%)
  •         Raw Materials Price Index, May, 6.7%, est. 5% (prior 0.7%)

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 mixed, curve flatter US 10Y unch @1.47%, longs well bid for a second day, 10s30s 2bps flatter.  Global stocks higher with the Nikkei +1.59% and Euro stocks ~2%. Commodities higher – crude up another 0.65% after 3% increase yest on API data which showed larger decline in inventories than exp.  Tsys fell in Asia trade as the Nikkei rose for a third day, expectations for further stimulus from the BOJ are fairly high after retail sales posted their third straight y/y decline. GOCs opening weaker, curve flatter, GOC 10Y 1.09% with 1.06% being the post Brexit low Friday. BOC auctions $3.9bln in 2Y notes at noon-reopened 0.25% May 1 18s. Provis tighter again today by 0.5bps after narrowing yest, expect supply with early close tomorrow.

News headlines                                                                                                                                       

• Merkel Says No Way Back From Brexit as Cameron Regrets Loss (Bloomberg) European Union leaders said there could be no turning back for the U.K. after Prime Minister David Cameron used his last EU summit to express disappointment at his failure to win the referendum he called on Britain’s membership. “As of this evening, I see no way back from the Brexit vote,” German Chancellor Angela Merkel told reporters after the meeting in Brussels on Tuesday. “This is no time for wishful thinking, but rather to grasp reality.”
• Stock futures tread higher as Brexit fears ebb (Reuters) U.S. stock index futures were higher for a second day as the initial panic surrounding Britain’s vote to leave the European Union settled and investors sought out bargains. The « Brexit » verdict on Friday sent shockwaves through global markets and wiped out about $3 trillion in a two-day selloff.
• Draghi sees Brexit vote hitting euro zone growth by up to 0.5 percent over three years: official (Reuters) European Central Bank President Mario Draghi told EU leaders on Tuesday that Britain’s decision to leave the EU could reduce euro zone growth by a cumulative 0.3 to 0.5 percent compared to previous estimates over the next three years, an EU official said. Earlier this month, before Britain’s June 23 EU referendum, the ECB estimated that the euro zone would grow in annual terms by 1.6 percent in 2016 and by 1.7 percent in 2017 and 2018.
• Japan’s May retail sales fall more than expected on gloomy recovery outlook (Reuters) Japan’s retail sales fell more than expected in May in a third straight month of annual declines, data showed on Wednesday, keeping policymakers under pressure for more stimulus to support a fragile economic recovery. Retail sales fell 1.9 percent in May from a year earlier, more than a median market forecast for a 1.6 percent declines, data from the Ministry of Economy, Trade and Industry showed.
• German inflation picks up in June, state data suggest (Reuters) German consumer prices rose slightly in June, regional data indicated on Wednesday, suggesting price pressures in Europe’s largest economy are slowly picking up, but they remain weak despite the European Central Bank’s ultra-loose monetary policy. Economists have said Britain’s decision to leave the European Union would further dampen growth and inflation across the euro zone, raising expectations the ECB may beef up its monetary stimulus to mitigate the impact.
• CIBC to Buy Privatebancorp in Deal Valued at $3.8 Billion (Bloomberg) Canadian Imperial Bank of Commerce agreed to buy PrivateBancorp Inc. and one of its units to boost its U.S. presence. CIBC will pay $18.80 in cash and 0.3657 of a CIBC common share for each PrivateBancorp share, it said in a statement on Wednesday. Based on the June 28 closing price of CIBC’s stock, the transaction value is about $3.8 billion, it said.

Overnight markets

• Overview: US 10yr note futures are down -0.0938% at 133-4, S&P 500 futures are up 0.74% at 2043.5, Crude oil futures are up 1.02% at $48.34, Gold futures are up 0.48% at $1324.2, DXY is down -0.43% at 95.827.

US Economic Data

• 8:30 AM: Personal Income,  May, 0.2%, est. 0.3% (prior 0.4%, revised 0.5%)
  • Personal Spending, May, 0.4%, est. 0.4% (prior 1.0%, revised 1.1%)
  • PCE Core, m/m, May, 0.2%, est. 0.2% (prior 0.2%)
  • PCE Core, y/y, May, 1.6%, est. 1.6% (prior 0.6%)
• 10 :30 AM : Pending Home Sales, m/m, May,  est. -1.1% (prior 5.1%)

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