Commentaires matinaux

Market Update

US tsys higher in active session with the 10Y 1.52% (-2bps), heavy volume in TY futures (915k or 3x avg). Tsy yields off best levels reached during the Asian session on optimism for a trade deal after Trump said ‘China called’ and wants to return to the table. US equity futures tumbled out of the gate with S&P futures -30pts in Asia, only to turn positive on the trade news with S&P +14. Tone in core Euro bonds risk-on so far with bund yields ~1bp higher despite weaker August IFO sentiment data. GOCs lagging the move in tsys, Can/US 2-3bps wider – eco data released last week showed the domestic economy hanging in quite well despite trade uncertainty and lower crude prices.  Q2 GDP, scheduled for this Friday, expected to rise 3.0% according to BB forecasts (from 2.5% previous survey) after 0.4% in Q1.

News headlines

U.S. Stock Futures Climb Amid Twists in Trade War: Markets Wrap (Bloomberg) U.S. equity-index futures turned higher along with shares in Europe after a down session in Asia on Monday as investors assessed the latest developments in the Sino-American trade war. The dollar strengthened.

TSX futures up on hopes of easing trade tensions (Reuters) Futures for Canada’s main stock index edged higher on Monday, bolstered by a rise in oil prices, as the United States and China sought to ease trade war tensions.

Oil Jumps After Trump Says China Wants to Restart Trade Talks (Bloomberg) Oil jumped after U.S. President Donald Trump said that China wanted to restart trade talks, potentially easing escalating tensions between the two countries.

Trump says China talks coming, Beijing calls for trade war resolution (Reuters) The United States and China sought to ease trade war tensions on Monday, with Beijing calling for calm and U.S. President Donald Trump predicting a deal after markets fell in response to new tariffs from both countries.

Trump-Abe trade deal helps U.S. farmers, staves off auto tariffs (BNN) The U.S. and Japan agreed in principle on a trade deal that would slash Tokyo’s tariffs on American beef, pork and other agricultural products, while delaying for now the threat of additional levies on Japanese auto exports to the U.S.

Japan denies it gave Trump too much in trade talks (Reuters) Japan’s top government spokesman denied on Monday that Tokyo made too many concessions in trade talks with the United States, saying the fact the two countries were able to reach a broad agreement was “very valuable.”

French, U.S. officials strike draft compromise on French digital tax (Reuters) French and U.S. negotiators have reached a compromise agreement on France’s digital tax, a levy which prompted U.S. President Donald Trump to threaten a separate tax on French wine imports, a source close to the negotiations said.

China aims to modernize industrial chains: top economic meeting (Reuters) China aims to modernize its industrial chains and boost self-reliance, state television said on Monday, citing a top-level economic meeting chaired by President Xi Jinping.

Market Overview: US 10yr note futures are up 0.048% at 131-01, S&P 500 futures are up 0.52% at 2870.25, Crude oil futures are up 1.05% at $54.74, Gold futures are up 0.2% at $1540.7, DXY is up 0.32% at 97.949, CAD/USD is up 0.13% at 0.7519.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.381%	2 Year	1.508%
5 Year	1.233%	5 Year	1.394%
10 Year	1.198%	10 Year	1.517%
30 Year	1.449%	30 Year	2.01%

US Economic Data

08:30 AM	Chicago Fed Nat Activity Index, Jul  Survey: 0.00  Prior: -0.02
	Durable Goods Orders, Jul P  Survey: 1.20%  Prior: 1.90%
	Durables Ex Transportation, Jul P  Survey: 0.00%  Prior: 1.00%
	Cap Goods Orders Nondef Ex Air, Jul P  Survey: 0.00%  Prior: 1.50%
	Cap Goods Ship Nondef Ex Air, Jul P  Survey: 0.10%  Prior: 0.30%
10:30 AM	Dallas Fed Manf. Activity, Aug  Survey: -4.00  Prior: -6.30

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Aug 23  Survey: —  Prior: 57.30

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

Market Update

US tsys reversing course, rising sharply on news China will impose retaliatory tariffs on $75bln of US goods, 25% tariffs on autos from Dec 15th, US 10Y 1.61%.  Fed Bullard sounding dovish, noting the inverted yield curve signals the Fed should be lowering rates, expects debate on 50bp rate cut in Sept. Focus on Jackson Hole & Powell speech at 10:00am. GOCs unch before June Retail Sales (-0.3% exp, core unch). HQ 2055 tap yesterday adding to upward move in spds, steepening at the long end of the GOC curve. Provi spds opening unch.

News headlines

Stock futures turn sharply lower after China threatens tariffs on U.S. goods (Reuters) U.S. stocks futures fell sharply on Friday after China said it would impose tariffs on about $75 billion worth of U.S. goods.

Seeking clarity from Fed’s Powell? Good luck with that (Reuters) When Federal Reserve Chair Jerome Powell speaks in Jackson Hole, Wyoming, on Friday, traders will comb through his remarks for clues on whether the U.S. central bank will deliver more rate cuts this year.

China to soon unveil plan for retaliatory tariffs on some U.S. products: Global Times (Reuters) China will soon unveil a plan to impose retaliatory tariffs on certain U.S. products, the editor in chief of China’s Global Times newspaper said.

Oil Heads for Second Weekly Increase Before Fed Chair’s Speech (Bloomberg) Oil headed for a second weekly gain as traders awaited guidance from the Federal Reserve on whether the U.S. will ease monetary policy to shore up economic growth.

This time isn’t different, says the Prof who first linked inverted yield curve with recession (BNN) The professor who first identified the yield curve inversion as a reliable indicator of a looming recession has a simple message for anyone arguing that this time is different: Don’t.

Cold, hard euros: Venezuela turns to European cash after U.S. sanctions (Reuters) From supermarket checkouts in the capital Caracas to electronics stores in the central city of Maracay, Venezuelans struggling with hyperinflation and a deep economic crisis are turning to a new form of payment: euros in cash.

Fed’s Bullard says Fed should continue to ease monetary policy: CNBC (Reuters) The U.S. Federal Reserve should continue to ease monetary policy because of the Treasury yield curve, which recently inverted again, St. Louis Federal Reserve President James Bullard said on Friday.

Market Overview: US 10yr note futures are down 0% at 130-10, S&P 500 futures are down -0.31% at 2913.25, Crude oil futures are down -0.27% at $55.2, Gold futures are up 0.23% at $1511.9, DXY is up 0.25% at 98.417, CAD/USD is up 0.13% at 0.7507.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.468%	2 Year	1.597%
5 Year	1.329%	5 Year	1.489%
10 Year	1.292%	10 Year	1.61%
30 Year	1.525%	30 Year	2.11%

US Economic Data

10:00 AM	New Home Sales, Jul  Survey: 647k  Prior: 646k
	New Home Sales MoM, Jul  Survey: 0.20%  Prior: 7.00%

Canadian Economic Data

08:30 AM	Retail Sales MoM, Jun  Survey: -0.30%  Prior: -0.10%
	Retail Sales Ex Auto MoM, Jun  Survey: 0.00%  Prior: -0.30%

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

Market Update

US tsys close to overnight lows , prices extending losses in recent trade on hawkish comments from Fed’s Esther George saying the Fed is not ready to provide more accommodation, while easing further creates more risk – US 10Y 1.62% (+3bps). Equities slightly higher, crude +0.70%, gold consolidating ~1500. Core Euro bonds lower on stronger regional PMIs, ECB minutes. Focus on start of Jackson Hole conference and Fed Powell speech at 10:00am Friday. In Canada, GOCs 3bps wider since July CPI came in slightly firmer yest.

News headlines

U.S. Stock Futures Drift; Dollar Climbs With Oil: Markets Wrap (Bloomberg) U.S. equity futures fluctuated and Europe stocks dipped as traders parsed economic data and awaited an address by the Federal Reserve chief on Friday. The dollar climbed with oil, while gold dipped.

Oil Steadies as Traders Await Signs on U.S. Monetary Policy (Bloomberg) Oil steadied after its first drop this week as attention turned from expanding American fuel stockpiles to the prospects for monetary easing as the world’s top central bankers gather in Jackson Hole, Wyoming.

OPEC’s market share sinks – and no sign of wavering on supply cuts (Reuters) OPEC’s share of the global oil market has sunk to 30%, the lowest in years, as a result of supply restraint and involuntary losses in Iran and Venezuela, and there is little sign yet producers are wavering on their output-cut strategy.

Fed doubts dominate as futures tick lower (Reuters) Wall Street’s main markets were set to edge lower on Thursday as the previous session’s hints of a skeptical Federal Reserve attitude to a new cycle of interest rate cuts offset a handful of more bullish signs from U.S. retailers.

On the front lines: Trade war sinks North Dakota soybean farmers (Reuters) COLFAX, North Dakota (Reuters) – North Dakota bet bigger on Chinese soybean demand than any other U.S. state.

Fed’s George reiterates opposition to July rate cut: CNBC (Reuters) Kansas City Federal Reserve Bank President Esther George reiterated her opposition to the rate cut that the U.S. central bank implemented in July.

ECB eyes stimulus package as growth looks weaker: minutes (Reuters) European Central Bank policymakers are concerned that growth is even weaker than earlier thought and a package of measures may be the best way to combat the slowdown, the accounts of the July 25 meeting showed on Thursday.

The Fed’s three reasons for cutting in July support another move (BNN) Federal Reserve officials viewed their interest-rate cut last month as insurance against headwinds from the trade war and low inflation — reasons that look even sharper as they move toward their meeting in September.

Canada’s Trudeau says won’t back down in dispute with China, urges restraint in Hong Kong (Reuters) Canadian Prime Minister Justin Trudeau said on Wednesday he would not escalate a deepening trade and diplomatic dispute with China but added that his government had no intention of backing down as it defended its interests.

Market Overview: US 10yr note futures are down -0.275% at 130-06, S&P 500 futures are up 0.15% at 2933.75, Crude oil futures are up 0.84% at $56.15, Gold futures are down -0.8% at $1503.6, DXY is up 0.02% at 98.318, CAD/USD is down -0.07% at 0.7529.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.432%	2 Year	1.594%
5 Year	1.31%	5 Year	1.506%
10 Year	1.268%	10 Year	1.622%
30 Year	1.494%	30 Year	2.099%

US Economic Data

08:30 AM	Initial Jobless Claims, Aug 17  Survey: 216k  Prior: 220k
	Continuing Claims, Aug 10  Survey: 1707k  Prior: 1726k
09:45 AM	Bloomberg Consumer Comfort, Aug 18  Survey: —  Prior: 61.20
	Bloomberg Economic Expectations, Aug  Survey: —  Prior: 55.00
	Markit US Manufacturing PMI, Aug P  Survey: 50.5  Prior: 50.4
	Markit US Services PMI, Aug P  Survey: 52.8  Prior: 53.0
	Markit US Composite PMI, Aug P  Survey: —  Prior: 52.6
10:00 AM	Leading Index, Jul  Survey: 0.30%  Prior: -0.30%

Canadian Economic Data

08:30 AM

Wholesale Trade Sales MoM, Jun  Survey: -0.20%  Prior: -1.80%

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