Commentaires matinaux

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

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