Comments
27/09/2019
Market Update
US tsys trading lower, yields2-3bps higher, 10Y 1.72% (+3bps), on avg volume in TY futures (~330k). August Personal Income/Spending and PCE on deck, U Michigan sentiment at 10:00am. Bunds/gilts paring gains despite Euro area confidence dropping to six year low and BOE Saunders saying rate cuts may still be needed with Brexit deal. GOCs lower in line with tsys, 10s30s 2bps wider yest after long HQ 55 deal, BOC switch operation.
News headlines
U.S. Stock-Index Futures Climb, Treasuries Slip: Markets Wrap (Bloomberg) U.S. futures advanced with stocks in Europe while Treasuries edged lower before a key inflation report in the world’s largest economy. The pound weakened for a third day.
Shares rise as trade optimism muffles impeachment noise (Reuters) World shares erased losses on Friday, buoyed by a wave of optimism that U.S.-China trade tensions might be easing as markets largely brushed off concerns about possible impeachment moves against U.S. President Donald Trump.
Futures tick higher on trade hopes (Reuters) Futures for Canada’s main stock index edged up on Friday, as U.S.-China trade optimism boosted investor sentiment.
Oil Slides After Report of Partial Saudi Cease-Fire in Yemen (Bloomberg) Oil fell after a report that Saudi Arabia has moved to impose a partial cease-fire in Yemen, bringing hope of easing tensions in the Middle East.
China’s top diplomat says Beijing willing to buy more U.S. products (Reuters) China’s top diplomat said on Thursday that China was willing to buy more U.S. products, and said trade talks would yield results if both sides “take more enthusiastic measures” to show goodwill and reduce “pessimistic language” in their trade dispute.
In counterweight to China, EU, Japan sign deal to link Asia (Reuters) The European Union and Japan signed an infrastructure deal on Friday to coordinate transport, energy and digital projects linking Europe and Asia, seeking an alternative to Chinese largesse that has raised suspicion in Brussels and Tokyo.
Oil shipping rates soar as U.S. supertanker sanctions rattle crude trade (Reuters) Key oil freight rates from the Middle East to Asia rocketed as much as 28% on Friday in a global oil shipping market spooked by United States sanctions on units of Chinese giant COSCO for alleged involvement in ferrying crude out of Iran.
Market Overview: US 10yr note futures are down -0.228% at 129-32, S&P 500 futures are up 0.24% at 2987.75, Crude oil futures are down -0.87% at $55.92, Gold futures are down -0.96% at $1500.6, DXY is up 0.04% at 99.17, CAD/USD is down -0.08% at 0.7544.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.59% | 2 Year | 1.678% |
| 5 Year | 1.418% | 5 Year | 1.606% |
| 10 Year | 1.381% | 10 Year | 1.718% |
| 30 Year | 1.561% | 30 Year | 2.164% |
US Economic Data
| 08:30 AM | Personal Income, Aug Survey: 0.40% Prior: 0.10% |
| Personal Spending, Aug Survey: 0.30% Prior: 0.60% | |
| PCE Deflator MoM, Aug Survey: 0.10% Prior: 0.20% | |
| PCE Deflator YoY, Aug Survey: 1.40% Prior: 1.40% | |
| PCE Core Deflator MoM, Aug Survey: 0.20% Prior: 0.20% | |
| PCE Core Deflator YoY, Aug Survey: 1.80% Prior: 1.60% | |
| Durable Goods Orders, Aug P Survey: -1.10% Prior: 2.00% | |
| Durables Ex Transportation, Aug P Survey: 0.20% Prior: -0.40% | |
| Cap Goods Orders Nondef Ex Air, Aug P Survey: 0.00% Prior: 0.20% | |
| Cap Goods Ship Nondef Ex Air, Aug P Survey: 0.30% Prior: -0.60% | |
| 10:00 AM | U. of Mich. Sentiment, Sep F Survey: 92.1 Prior: 92.0 |
Canadian Economic Data
There is no Canadian 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, Émile Bordeleau
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
26/09/2019
Market Update
Tsys trading higher, 10Y 1.71% (-2.5bps), prices pulling back since uptick in Asia trade which saw 10Y trade below 1.70%. No reaction to as expected Q2 GDP, core prices higher (1.9% vs 1.7%). Equity futures higher, S&P +6, crude lower for 3rd day 56.40. Fed 14-day term repo operation saw $72.8bln in bunds for $60bln offering. Core Euro bonds mixed on now news, bunds lower as equity futures move higher. GOCs higher in line with tsys, 10s30s 2bps wider, even as 2s10s has moved back to recent narrows -20bps. BOC switch operation buying back off the run longs for Dec 51s for $400mln max.
News headlines
U.S. Futures, Europe Stocks Climb With Treasuries: Markets Wrap (Bloomberg) U.S. equity futures edged higher with Asian stocks on Thursday while European shares jumped as investors awaited the next developments in a week dominated by political dramas and a lack of clarity over trade. In a sign of the mixed sentiment, Treasuries also climbed, continuing a choppy few days.
Futures rise on U.S.-China trade optimism (Reuters) Futures for Canada’s main index were higher on Thursday, as sentiment was lifted by positive comments from China on the trade talks with the United States.
China says in close communication with U.S. over October trade talks (Reuters) China and the United States are still discussing details about upcoming trade talks in October, making preparations to ensure “positive progress” is made during the negotiations, the Chinese commerce ministry said on Thursday.
U.S. Fed should target repo rate to reduce market volatility: ex-Fed officials (Reuters) Recent money market volatility shows the Federal Reserve needs to retool how it manages an essential part of the financial system to minimize disruptive market swings that pose risks to the economy, two former Fed officials said on Thursday.
BOJ’s Kuroda warns of overseas risks, signals readiness to adjust policy (Reuters) Japan’s central bank governor signaled on Thursday readiness to ease monetary policy further, vowing to guide policy appropriately “without any preset conditions in mind”.
Oil Steady as Investors Weigh Trade Hope Against Saudi Recovery (Bloomberg) Oil was steady as investors weighed prospects of a thaw in the U.S.-China trade war against indications Saudi Arabia is recovering quicker than expected from the biggest attacks ever on its energy industry.
Its leash lengthened, China’s yuan flirts with trade war role (Reuters) China, having let the yuan cross the once sacred red line of 7 per dollar, will allow its currency to fall further and may even risk U.S. anger by using it as a bargaining chip in already thorny trade talks, market participants believe.
In Michigan steel towns, tariffs meant to revive industry cost jobs (Reuters) Some steelworkers who cheered U.S. President Donald Trump’s tariffs on foreign steel last year are now being laid off, an unintended consequence of his America First policy as United States Steel Corp (X.N) reacts to sagging demand from automakers reeling from higher steel prices.
Market Overview: US 10yr note futures are up 0.06% at 130-01, S&P 500 futures are up 0.21% at 2992.5, Crude oil futures are up 0.09% at $56.54, Gold futures are down -0.04% at $1511.7, DXY is up 0.03% at 99.064, CAD/USD is down -0.2% at 0.7551.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.584% | 2 Year | 1.676% |
| 5 Year | 1.423% | 5 Year | 1.6% |
| 10 Year | 1.389% | 10 Year | 1.715% |
| 30 Year | 1.558% | 30 Year | 2.163% |
US Economic Data
| 08:30 AM | GDP Annualized QoQ, 2Q T Survey: 2.00% Actual: 2.00% Prior: 2.00% |
| Personal Consumption, 2Q T Survey: 4.70% Actual: 4.60% Prior: 4.70% | |
| GDP Price Index, 2Q T Survey: 2.40% Actual: 2.40% Prior: 2.40% | |
| Core PCE QoQ, 2Q T Survey: 1.70% Actual: 1.90% Prior: 1.70% | |
| Wholesale Inventories MoM, Aug P Survey: 0.10% Actual: 0.40% Prior: 0.20% | |
| Initial Jobless Claims, Sep 21 Survey: 212k Actual: 213k Prior: 208k | |
| Continuing Claims, Sep 14 Survey: 1666k Actual: 1650k Prior: 1661k | |
| 09:45 AM | Bloomberg Consumer Comfort, Sep 22 Survey: — Prior: 62.7 |
| 10:00 AM | Pending Home Sales MoM, Aug Survey: 1.00% Prior: -2.50% |
| 11:00 AM | Kansas City Fed Manf. Activity, Sep Survey: -4 Prior: -6 |
Canadian Economic Data
| 06:00 AM | CFIB Business Barometer, Sep Survey: — Actual: 59.3 Prior: 60.6 |
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, Émile Bordeleau
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
25/09/2019
Market Update
Tsys slightly lower, declining as equity futures pare losses, 10Y 1.65%, focus on House Democrat’s impeachment inquiry with transcript of call between trump and Ukrainian Pres expected to be released today. S&P futures have rallied back close to unch after being down 0.50%, DXY erasing yesterday’s losses. No eco data thou multiple Fed speakers and $18bln 2Y FRN & $41bln 5Y note auctions. UK gilts outperforming in core Europe, fallout from yest Supreme Court ruling hitting the BP. GOCs higher, 1bp narrower vs tsys in 10s, 3Y auction at noon (reopening Sep 22s for $2.4bln).
News headlines
U.S. Futures Slip, Europe Stocks Slump; Oil Falls: Markets Wrap (Bloomberg) U.S. equity-index futures dipped while stocks slumped in Europe and Asia as investors weighed the deepening political gridlock in Washington against prospects for reduced trade tension between America and China. The dollar advanced and oil fell.
TSX futures slip on lower oil prices (Reuters) Futures for Canada’s main index fell on Wednesday, as oil prices slipped over demand concerns.
Oil Declines as Saudi Arabia Restores Capacity Ahead of Schedule (Bloomberg) Oil extended declines as Saudi Arabia was said to be ahead of schedule in restoring its output capacity.
Explainer: Trade deal in focus as Trump, Japan’s Abe head for summit (Reuters) U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe meet in New York later on Wednesday to try to clinch a deal on farm tariffs and digital trade.
Trump impeachment? History suggests Wall Street ought not worry (Reuters) The move by Democrats in the U.S. Congress on Tuesday to launch a formal impeachment inquiry into President Donald Trump has caused nervousness on Wall Street – but history suggests investors need not worry.
Sanctions-hit Iran props up economy with bartering, secret deals (Reuters) Washington’s policy of applying “maximum pressure” on Iran with wide-ranging sanctions has shredded the country’s oil revenues, sent its economy into recession and devalued its national currency.
China says has no intent to play ‘Game of Thrones’ but warns on sovereignty (Reuters) China’s top diplomat hit back at U.S. criticism of its trade and development model on Tuesday, saying Beijing had no intention to “play the Game of Thrones on the world stage” but warned Washington to respect its sovereignty, including in Hong Kong.
Market Overview: US 10yr note futures are down -0.096% at 130-19, S&P 500 futures are down -0.07% at 2968.25, Crude oil futures are down -1.87% at $56.22, Gold futures are down -0.4% at $1534, DXY is up 0.43% at 98.763, CAD/USD is up 0.27% at 0.7532.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.516% | 2 Year | 1.614% |
| 5 Year | 1.333% | 5 Year | 1.529% |
| 10 Year | 1.299% | 10 Year | 1.647% |
| 30 Year | 1.472% | 30 Year | 2.096% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, Sep 20 Survey: — Actual: -10.1% Prior: -0.1% |
| 10:00 AM | New Home Sales, Aug Survey: 659k Prior: 635k |
| New Home Sales MoM, Aug Survey: 3.8% Prior: -12.8% |
Canadian Economic Data
There is no Canadian 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, Émile Bordeleau
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230