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15/09/2015

by | Sep 15, 2015 |

Market update

US tsys higher, curve flatter on light volume, 10Y 2.18%. European equities rebounding from o/n losses, as Chinese stocks fell another 3.5%. Crude is higher, gold slightly lower. JGBs lower as BOJ did not add to stimulus as some had expected, hawkish comments from Kuroda. Core Euro bonds lower led by 10Y bunds despite weaker German ZEW ,UK gilts lower as CPI fell to 0.0% matching estimates. In Canada, GOCs are lower led by 5s (~1.5bps),a flurry of corp deals yest weighing on Cda/US. After $1.7bln in NIs yest, still expecting more deals today in front of the FOMC decision Wednesday. Provis unch after widening ~1bp yest on corp supply – Ont 46 101/100.5, Ont45/25 11.2/10.9 – .5bps tighter wk/wk.

News headlines

  • U.S. retail sales rise 0.2% in August; gas spending falls (Marketwatch) Sales at U.S. retailers rose a modest 0.2% in August, with consumers spending far less on gasoline but more on new cars and trucks. That matched the forecast of economists polled by MarketWatch. Sales minus autos rose 0.1%, but they were up a healthier 0.4% excluding gasoline, the Commerce Department said Tuesday.
  • Bank of Japan stands firm on easing (FT) The Bank of Japan kept monetary policy on hold on Tuesday and stuck with a bullish message about growth despite deteriorating data on the Japanese economy. Haruhiko Kuroda, the BoJ governor, insisted Japan’s economy was still enjoying a moderate recovery and claimed there was a widening trend towards higher prices.
  • Federal Reserve sharpens tools for lift-off (FT) Engineering the great escape from near-zero interest rates will present the Federal Reserve with a universe of challenges. A key one is ensuring short-term market interest rates obediently head where the Fed wants to see them.
  • Oil Patch Braces for Financial Reckoning (WSJ) U.S. energy companies have defied financial gravity for more than a year, borrowing and spending billions of dollars to pump oil, even as crude prices plummeted. Until now.

Overnight markets 

  • Overview: IG24 5Y 79.5/80 (+0), US 10yr note futures are down -0.05% at 127-15+, S&P 500 futures are up +0.06% at 1945.25, Crude oil futures are up +0.98% at 44.43, Gold futures are down -0.09% at $1106.7, DXY is down -0.07% at 95.184.
  • US BANK CDS (5yr): BAC 74/78 (+0), GS 90/94 (+0), MS 82/86 (+0), C 82/86 (+0), JPM 75/79 (+0), WFC 56/60 (+0)

US Economic Data

  • Retail sales increased 0.2% MoM in August, below expectations, after increasing 0.7% the previous month.
  • Retail sales excluding automobiles increased 0.1% in August, compared to consensus of a 0.2% gain, and a revised 0.6% increase in July.
  • Empire manufacturing increased to -14.67 in September from a reading of -14.92 in August. Analysts had expected the index to rise to -0.5.
  • Industrial production is expected at -0.2% MoM in August compared to July 0.6%.
  • Capacity utilization is forecast at 77.8% in August, 0.2% lower than previous month.
  • Manufacturing production is expected at -0.3% MoM in August compared to 0.8% in July.
  • Business inventories are forecast to increase 0.1% MoM in July, lower than the 0.8% increase the previous month.

Canadian Economic Data 

  • Existing home sales for August will be release at 9:00.

 

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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

11/09/2015

by | Sep 11, 2015 |

Market update

US tsys higher, curve flatter with long bonds out performing, US 10Y below 2.2% (2.195 -2.6bps), tsys bid despite stronger PPI (unch vs -0.1% exp, core 0.3% vs 0.1% exp). Light volume o/n in tsy futures with FOMC decision looming next week. Core EU bonds higher led by 10Y bunds on ECB Coeure dovish QE comments (see above). Euro stocks lower, USD higher, gold & crude lower on risk off. GOCs higher, lagging tsys. Provis Ont/QC spds tighter in 5s, unch in longs as supply exp. – Ont 46s 100.5/99.5, Ont 45/25 bx 11.5/11.3 unch. QC 48 deal  still widely expected.

News headlines 

  • No Hard Landing for China, Premier Says (WSJ) Chinese Premier Li Keqiang told Chinese and foreign executives that China’s economy is in good hands, reforms are on track and recent volatility wouldn’t affect the country’s economic trajectory.
  • One Volatile Week Could Seal Fed Stance After Years of Low Rates (Bloomberg) Call it the tail wagging the dog. After holding interest rates at rock-bottom levels since 2008 to support the U.S. economy, the Federal Reserve’s decision whether to raise them this month may boil down to what happens in financial markets during the next five trading days.
  • Why investors are overlooking Canadian banks’ better-than-expected performance (FP) Canadian banks may have reported better-than-expected third-quarter results, but the market doesn’t seem to care, partly because the outlook for bank stocks is anything but strong for the coming months given that the country’s economy slipped into a recession and oil prices are stuck deep in bear market territory.

Overnight markets

  • Overview: IG24 5Y 80/80.5 (+0.38), US 10yr note futures are up +0.14% at 127-10+, S&P 500 futures are down -0.27% at 1934.50, Crude oil futures are down -2.29% at 44.87, Gold futures are down -0.40% at $1104.9, DXY is up +0.15% at 95.601.
  • US BANK CDS (5yr): BAC 75/79 (+1), GS 92/96 (+0), MS 82/86 (+0), C 83/87 (+0), JPM 75/79 (+0), WFC 56/60 (+0)

US Economic Data

  • PPI came in at 0.0% MoM (-0.8% YoY) in August versus July 0.2% MoM (-0.8% YoY).
  • PPI core decreased 0.3% MoM (+0.9% YoY) in August compared to previous month 0.3% MoM (0.6% YoY).
  • University of Michigan confidence (P) is expected at 91.1 in September 0.8 point lower than previous month.
  • Monthly budget statement is forecast at -$77.5B in August versus -$149.187B in July.

Canadian Economic Data 

  • There is no major economic data 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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

10/09/2015

by | Sep 10, 2015 |

Market update

US tsys slightly higher, US 10Y 2.20%, better bid after 8:30 claims & import price data (import prices lower 12th straight month on y/y basis). Expect less of a concession going into 30Y auction at 1:00PM given solid 10Y yest (10Y reached 2.25% at 1:00PM auction time, rallied thru the close). Tsys were also pressured by a huge amt of IG corp issuance (over $40bln in 2 days, yest $13.6bln). Core Euro bonds outperforming, 10Y bund/tsy spd widest in 3 weeks – Apple & Shell set to price in EUR, Apple E1.5-2bln in another case of corp issuance to fund buybacks/dividends… In Canada, GOCs lower, provis 0.5bps wider with lower stocks. Yesterday saw solid outperformance in Cda leading up to BOC decision – after which CBGs tanked giving up ~7bp vs tsys by the close. Busy day in corps with Ford issuing $750mln (upsized) 5Y  @ 213 or ~ 5 bps back where we saw CAD 21s  -so at least 15 bps concession.. Needless to say the deal was well reciced with fills in the 25% area and bonds trading tighter in secondary.

News headlines

  • BOE Says Global Turmoil Hasn’t Shaken Its Economic Outlook (Bloomberg) Bank of England policy makers said the U.K. economy’s prospects remain positive and market turmoil related to China’s slowdown hasn’t shaken their view that the time for a rate increase is approaching.
  • Europe retreats as Fed uncertainty persists (FT) Rally. Retreat. Repeat. Volatility rules in equity markets amid continued uncertainty over China’s economy and US monetary policy, with many Asian and European stock barometers giving back chunks of the previous day’s sturdy gains.
  • Fed Wavers on September Rate Rise (WSJ) Federal Reserve officials aren’t near an agreement to begin raising short-term interest rates heading into a crucial week of private discussions before their Sept. 16-17 policy meeting, according to their recent comments.

Overnight markets

  • Overview: IG24 5Y 81.2/81.7 (+0.45), US 10yr note futures are down -0.13% at 127-08+, S&P 500 futures are down -0.58% at 1931.50, Crude oil futures are down -0.09% at 44.11, Gold futures are up +0.56% at $1108.2, DXY is down -0.10% at 95.916.
  • US BANK CDS (5yr): BAC 74/78 (+1), GS 91/95 (+0), MS 81/85 (+0), C 82/86 (+0), JPM 74/78 (+0), WFC 55/59 (+0)

US Economic Data

  • Initial jobless claims came in at 275K  for the week ending September 5th, equal to expected (275K) and lower than prior week (281K).
  • Continuing claims increased to 2260K from 2259K and slightly higher than expected (2253K).
  • Import price index came in at -1.8% MoM (-11.4% YoY) in August versus July -0.9% MoM (-10.5% YoY).
  • Wholesale Inventories are forecast at 0.3% MoM in July versus 0.9% MoM for previous month.
  • Wholesale trade sales are expected at 0.1% MoM in July lower than June 0.1% MoM increase.

Canadian Economic Data

  • New housing price index increased 0.1% MoM (+1.3% YoY) in July compared to June 0.3% MoM (1.3% YoY).
  • Capacity utilization came in at 81.3% in 2Q 2015, 1.3% lower than previous month.

 

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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230