Commentaires matinaux

Market Update

US tsys lower, yields 2-3bps higher, curve slightly steeper 2s10s , 10Y 1.585%(+2.7bps), moderate volume in TY futures (350k).  US equity futures higher (+0.70%) with European stocks (Stoxx +1.3%), crude higher for 4th day 56.95 (+1.5%). Germany’s first 30Y auction with a zero coupon was uncovered with only E824mln in bids vs E2bln target, 30Y German yields fell to -0.28% last week. FOMC minutes this afternoon key event in the US later this aft. In Canada, CPI  is forecast to have risen 0.2% in July from -0.2% in June, mostly due to a 3% rebound rise in retail gas prices and seasonal airfare increases. The BOC auctions $4.2bln in Sep 24s at noon.

News headlines

U.S. Futures Climb as Treasuries Slip; Oil Gains: Markets Wrap (Bloomberg) U.S. equity futures climbed with European stocks after a mixed session in Asia as investors assessed the latest news on trade and awaited more clues on monetary policy. Treasury yields ticked higher and the dollar was steady.

TSX futures inch up on higher oil prices (Reuters) Futures for Canada’s main stock index edged higher on Wednesday, as oil prices rose after industry data showed a larger-than-expected drop in U.S. crude inventories.

Royal Bank of Canada profit misses on weak equity trading (Reuters) Royal Bank of Canada (RY.TO) missed analysts’ estimates for quarterly profit on Wednesday as equity trading weakened and it kept aside more funds to cover bad loans.

Trump says he had to ‘take China on,’ regardless of short-term impact on U.S. economy (Reuters) U.S. President Donald Trump said on Tuesday he had to confront China over trade even if it caused short-term harm to the U.S. economy because Beijing had been cheating Washington for decades.

Oil up 1 percent, buoyed by U.S. stock drawdown (Reuters) Crude oil futures rose on Wednesday after industry data showed a larger than expected drop in U.S. crude inventories, but gains were capped by lingering worries about a possible global recession.

U.S. is ‘very far from a recession,’ Trump says (BNN) President Donald Trump has consistently rejected a growing number of forecasts that his trade war with China and slowing global growth are pitching the U.S. economy toward recession. But he’s also spending a lot of time outlining policies to stave it off.

Germany readies for possible realities, such as disorderly Brexit (Reuters) Germany is preparing for a no-deal Brexit although Berlin would still prefer an orderly British divorce from the European Union, a German government spokesman said on Wednesday before Prime Minister Boris Johnson meets Chancellor Angela Merkel.

FOREX-Euro struggles vs dollar as attention turns to Fed (Reuters) The euro struggled to make headway against a resilient dollar on Wednesday and was stuck near $1.11, with forex markets mostly calm ahead of a crucial meeting of central bankers later this week.

Market Overview: US 10yr note futures are down -0.179% at 130-16, S&P 500 futures are up 0.68% at 2918, Crude oil futures are up 1.28% at $56.85, Gold futures are down -0.43% at $1509.2, DXY is down -0.05% at 98.141, CAD/USD is down -0.19% at 0.7522.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.362%	2 Year	1.534%
5 Year	1.228%	5 Year	1.459%
10 Year	1.192%	10 Year	1.581%
30 Year	1.424%	30 Year	2.06%

US Economic Data

07:00 AM	MBA Mortgage Applications, Aug 16  Survey: —  Actual: -0.90% Prior: 21.70%
10:00 AM	Existing Home Sales, Jul  Survey: 5.39m  Prior: 5.27m
	Existing Home Sales MoM, Jul  Survey: 2.30%  Prior: -1.70%
02:00 PM	FOMC Meeting Minutes, Jul 31

Canadian Economic Data

08:30 AM	CPI NSA MoM, Jul  Survey: 0.20%  Prior: -0.20%
	CPI YoY, Jul  Survey: 1.70%  Prior: 2.00%
	Consumer Price Index, Jul  Survey: 136.60  Prior: 136.30

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

Tsys higher on moderate volume (TY 375k) , long end outperforming, 10Y  1.57 (-3.6bps). US equity futures flat, crude unch @ 56.00. Home Depot +2.5% pre-mkt on optimistic outlook for consumer spending & housing. Limited data in the US with focus on July FOMC minutes and start of Jackson Hole Friday. German bunds higher, EU peripherals wider led by Italy as Salvini offers tax cuts, spending worth E50bln in 2020 budget proposal.  GOCs higher with tsys, yields 2-3bps lower, 10Y 1.15%. Longs lagging yest with combination of CGB block buyer and long Ontario issue pressuring 10s30s 1bp wider

News headlines

Stocks Drift as Trade, Economic Momentum Mulled: Markets Wrap (Bloomberg) U.S. index futures drifted with stocks in Europe as investors digested developments in trade talks and comments from a Federal Reserve official about the strength of the biggest economy. Treasuries climbed and a gauge of the dollar held close to the year’s high.

U.S. yield curve: Invert, steepen, repeat (Reuters) A swift steepening of the U.S. 2-year/10-year yield curve after it inverted last week may have given investors hope that the United States can escape recession. They should probably take a breath.

TSX futures edge up on higher gold prices (Reuters) Futures for Canada’s main stock index inched up on Tuesday, supported by firmer gold prices against the backdrop of global growth concerns.

Oil Steadies as U.S.-China Trade Progress Allays Demand Concerns (Bloomberg) Oil steadied near $56 a barrel as hints of a trade detente between the U.S. and China, along with the prospect of monetary stimulus, buoyed financial markets.

Huawei founder details ‘battle mode’ reform plan to beat U.S. crisis (Reuters) China’s Huawei will spend more on production equipment this year to ensure supply continuity, cut redundant roles and demote inefficient managers as its grapples with a “live-or-die moment” in the wake of U.S. export curbs, founder Ren Zhengfei said.

Japan allows further exports of high-tech material to South Korea (reuters) Japan has approved shipments of a high-tech material to South Korea for the second time since imposing export curbs last month, two sources said, ahead of talks by government officials this week to resolve a dispute stemming from their wartime past.

Fed’s Rosengren wants evidence of slowdown to justify rate cut (BNN) Federal Reserve Bank of Boston President Eric Rosengren continued to push back against further interest-rate cuts by the central bank, arguing he’s not convinced that slowing trade and global growth will significantly dent the U.S. economy.

Trump’s Trade War Is Keeping the Dollar Strong, Not the Fed (Bloomberg) Donald Trump has blamed the stubbornly strong dollar on the Federal Reserve’s reluctance to slash interest rates further. But real yields suggest investors fearful of the president’s trade war are what’s keeping the greenback strong.

Market Overview: US 10yr note futures are up 0.12% at 130-19, S&P 500 futures are up 0.09% at 2926.5, Crude oil futures are down -0.48% at $55.94, Gold futures are up 0.22% at $1515, DXY is up 0.04% at 98.39, CAD/USD is up 0.05% at 0.7502.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.334%	2 Year	1.521%
5 Year	1.188%	5 Year	1.446%
10 Year	1.151%	10 Year	1.574%
30 Year	1.374%	30 Year	2.058%

US Economic Data

There is no US economic data for today.

Canadian Economic Data

08:30 AM	Manufacturing Sales MoM, Jun  Survey: -1.80%  Prior: 1.60%
	Teranet/National Bank HPI MoM, Jul  Survey: —  Prior: 0.80%

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

Market Update

US tsys off the lows as equities give up some earlier gains (S&P +1%, +4% from Thursday’s low 2818), 10Y 1.60% (+4bps). Tsys steady then under pressure in Europe, steepening with German bunds – bund curve 12bps steeper since Thursday. Euro area CPI rise 1% last month, revised lower from 1.1% adding to the negative data flow from Europe and raising odds of additional ECB stimulus.  Focus this week on Jackson Hole conference and Powell speech on Friday. GOCs lagging the move lower in tsys, GOC 10Y 1.18 (+2bps), curve only marginally steeper (1bp) compared to huge move in US & Europe. CPI/Retail Sales key data this week. Odds of a rate cut at the October meeting have risen sharply since the start of the month to ~65% currently.

News headlines

Stocks Climb Globally With Dollar; Treasuries Drop: Markets Wrap (Bloomberg) U.S. equity futures rose alongside stocks in Europe and Asia as traders parsed the latest trade news from Washington and awaited commentary from the Federal Reserve chief. Treasuries fell with European government bonds.

TSX set to open higher as oil prices rise (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Monday as crude prices rose after an attack on a Saudi oil facility by Yemeni separatists during the weekend.

Oil Rises as Drone Attack on Saudi Oilfield Stokes Mideast Fears (Bloomberg) Oil rose for a second day as a drone attack on a Saudi Arabian oil field revived concerns that the tense Middle East political situation may jeopardize crude exports.

Explainer: How China’s new interest rate reforms will work (Reuters) China’s central bank pushed out long-awaited interest rate reforms on Saturday by establishing a reference rate for new loans issued by banks to help steer corporate borrowing costs lower and support a slowing economy.

Stimulus optimism boosts stocks, eases pressure on bonds (Reuters) World stock markets rose on Monday on signs that major economies would look to prop up stalling growth with fresh stimulus measures, easing pressure on bonds and dampening demand for perceived safe-havens such as gold.

BoE’s Carney says negative rates not an option for UK: Central Banking (Reuters) Bank of England Governor Mark Carney said he did not think negative interest rates were an option for the British economy at the moment, in comments published on Monday.

German economy could continue to shrink: Bundesbank (Reuters) The German economy could have continued to shrink over the summer as industrial production drops amid a dearth of orders, the Bundesbank said on Monday, suggesting that the euro zone’s biggest economy is now in a recession.

Trump says U.S. is talking with China but not ready for a deal (BNN) President Donald Trump said the U.S. is “doing very well with China, and talking!” but suggested he wasn’t ready to sign a trade deal, hours after his top economic adviser laid out a potential timeline for the resumption of substantive discussions with Beijing.

Market Overview: US 10yr note futures are down -0.358% at 130-15, S&P 500 futures are up 1.04% at 2921.5, Crude oil futures are up 0.6% at $55.2, Gold futures are down -1.14% at $1506.2, DXY is up 0.08% at 98.218, CAD/USD is down -0.09% at 0.7541.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.362%	2 Year	1.513%
5 Year	1.231%	5 Year	1.459%
10 Year	1.205%	10 Year	1.603%
30 Year	1.425%	30 Year	2.094%

US Economic Data

There is no US economic data for today.

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Aug 16  Survey: —  Prior: 57.8

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