Commentaires matinaux

Market Update

US tsys drifting lower since the late afternoon spike yest, which saw the 10Y yield fall to the lowest since August 2016 below 1.50%, currently 1.525% (unch), volume in TY futures closer to avg (383k).  EGBs mixed 10Y bund yield new lows @ -0.73%, UK gilt curve bear flattening, 2Y gilt yields +7bps, GBP higher for second day. US money market fund assets have surged to the highest since 2009 according to ICI, with net inflows in 16 out of the last 17 weeks. In Canada, GOCs lower, yields 1-3bps higher with the 10Y 1.11%, after making new low yest 1.08%. Long outperformance main theme over the past week, 10s30s 5bps flatter, similar to move in the US. Sask reopened their 2050 issue @ 91.5 yest, (Ontario +7), spreads unch this morning.  AIMCo Realty tapped their 10Y issue @ 115, the tighter end of guidance, issue closed 2bps tighter.

News headlines

U.S. Futures Rise to End Volatile Week; Bonds Dip: Markets Wrap (Bloomberg) U.S. equity futures climbed with European stocks and most Asian shares posted modest gains, as a tumultuous week of trade uncertainty and fears over global growth nears its end. Treasuries pared some of Thursday’s advance.

TSX futures gain on higher oil prices (Reuters) Futures for Canada’s main stock index were up on Friday as crude oil prices rebounded after positive U.S. retail sales data helped ease concerns of a recession in the world’s largest economy.

Oil Heads for Weekly Gain as Trade War Headlines Whipsaw Market (Bloomberg) Oil headed for a weekly increase as hopes that the U.S. and China could resume negotiations to resolve their trade dispute capped a week of volatile trading.

Exclusive: China-owned oil tanker changes name in apparent effort to evade U.S. sanctions (Reuters) While in the Indian Ocean heading toward the Strait of Malacca, the very large crude carrier (VLCC) Pacific Bravo went dark on June 5, shutting off the transponder that signals its position and direction to other ships, ship-tracking data showed.

Powell expected to seek another cut despite strong spending (BNN) The U.S. data pouring in supports Federal Reserve Chairman Jerome Powell’s forecast of solid economic growth and higher inflation. Still, economists remain confident that Powell will cut interest rates again next month as insurance against a global slowdown.

Trump says China talks ‘productive’; Beijing vows tariff retaliation (Reuters) U.S. President Donald Trump said on Thursday that U.S. and Chinese negotiators were holding “productive” trade talks and expected them to meet in September despite U.S. tariffs on over $125 billion worth of Chinese imports taking effect Sept 1.

Brazil’s foreign exchange move paves way to reduce $385 billion reserve stash (Reuters) Brazil’s decision to sell dollars on the spot market for the first time in a decade is a sign the central bank is finally willing to reduce its $385 billion pile of foreign exchange reserves, analysts said.

Market Overview: US 10yr note futures are down -0.024% at 130-30, S&P 500 futures are up 0.85% at 2872.75, Crude oil futures are up 0.51% at $54.75, Gold futures are down -0.5% at $1523.6, DXY is up 0.13% at 98.27, CAD/USD is down -0.12% at 0.752.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.316%	2 Year	1.495%
5 Year	1.161%	5 Year	1.42%
10 Year	1.112%	10 Year	1.529%
30 Year	1.321%	30 Year	1.983%

US Economic Data

08:30 AM	Housing Starts, Jul  Survey: 1256k Actual: 1191k  Prior: 1253k
	Housing Starts MoM, Jul  Survey: 0.20% Actual: -4.00%  Prior: -0.90%
	Building Permits, Jul  Survey: 1270k Actual: 1336k  Prior: 1220k
	Building Permits MoM, Jul  Survey: 3.10% Actual: 8.4%  Prior: -6.10%
10:00 AM	U. of Mich. Sentiment, Aug P  Survey: 97.00  Prior: 98.40

Canadian Economic Data

08:30 AM

Int’l Securities Transactions, Jun  Survey: — Actual: -3.98b Prior: 10.20b

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 higher, yields ~1bps lower with the 10Y  1.57% , very heavy overnite volume in TY futures (970k). US equity futures rebounding from earlier losses after China trade retaliation threat. Walmart  up 7% pre-mkt on  Q2 eps beat & revised outlook.  US Retail Sales rose 0.7% – strongest reading since March, vs 0.3% exp. , while the Phili Fed index rose to 16.8 vs 9.5 exp in August. In Canada, GOCs higher, outperforming tsys by 0.5-1bp.

News headlines

Futures Rise on Trade Optimism, Walmart Results: Markets Wrap (Bloomberg) U.S. equity futures rose on trade optimism and results from Walmart Inc. that bolstered confidence in the American consumer. Treasuries resumed their rally on persistent worries about global growth.

TSX futures down as oil prices drop (Reuters) Futures pointed to a lower opening for Canada’s main stock index on Thursday, as recession worries and rising U.S. crude inventories hurt oil prices.

Oil Holds Losses as U.S. Stockpile Gain Adds to Recession Fears (Bloomberg) Oil held losses as a surprise gain in U.S. crude stockpiles added to deepening concerns over the outlook for global demand.

China says it must take counter-measures to latest U.S. tariffs (Reuters) China has to take necessary counter-measures to the latest U.S. tariffs on $300 billion of Chinese goods, the finance ministry said on Thursday.

Euro zone bank share meltdown brings prices to brink of 1980s (Reuters) Negative interest rates, toppling bond yields, greater regulation and rising recession signals have wiped out most of the value of European banks, with their shares now at meltdown prices approaching the days of the Berlin Wall.

Online spending helps UK retail sales grow unexpectedly in July (Reuters) British retail sales unexpectedly edged up in July, helped by the strongest growth in online spending in three years, as consumers continued to support the economy before the Oct. 31 Brexit deadline.

U.S. yield curve remains inverted for second day (Reuters) The U.S. yield curve was inverted for the second straight trading session on Thursday, as investors’ concerns that the world’s biggest economy could be heading for recession deepened. US2US10=RR

Market Overview: US 10yr note futures are up 0.144% at 130-23, S&P 500 futures are up 0.45% at 2853.5, Crude oil futures are down -1.12% at $54.61, Gold futures are down -0.23% at $1524.3, DXY is down -0.09% at 97.896, CAD/USD is down -0.05% at 0.7512.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.33%	2 Year	1.532%
5 Year	1.174%	5 Year	1.458%
10 Year	1.121%	10 Year	1.547%
30 Year	1.332%	30 Year	1.979%

US Economic Data

08:30 AM	Empire Manufacturing, Aug  Survey: 2.0 Actual: 4.8  Prior: 4.3
	Nonfarm Productivity, 2Q P  Survey: 1.40%  Actual: 2.30% Prior: 3.40%
	Unit Labor Costs, 2Q P  Survey: 2.00% Actual:2.40%  Prior: -1.60%
	Philadelphia Fed Business Outlook, Aug  Survey: 9.5 Actual:16.8  Prior: 21.8
	Retail Sales Advance MoM, Jul  Survey: 0.30% Actual: 0.7%  Prior: 0.40%
	Retail Sales Ex Auto MoM, Jul  Survey: 0.40% Actual: 1.0%  Prior: 0.40%
	Retail Sales Ex Auto and Gas, Jul  Survey: 0.50% Actual: 0.90%  Prior: 0.70%
	Initial Jobless Claims, Aug 10  Survey: 212k Actual: 220k  Prior: 209k
	Continuing Claims, Aug 3  Survey: 1685k Actual: 1726k  Prior: 1684k
09:15 AM	Industrial Production MoM, Jul  Survey: 0.10%  Prior: 0.00%
	Capacity Utilization, Jul  Survey: 77.80%  Prior: 77.90%
09:45 AM	Bloomberg Consumer Comfort, Aug 11  Survey: —  Prior: 62.9
10:00 AM	NAHB Housing Market Index, Aug  Survey: 65  Prior: 65
	Business Inventories, Jun  Survey: 0.10%  Prior: 0.30%
04:00 PM	Net Long-term TIC Flows, Jun  Survey: —  Prior: $3.5b
	Total Net TIC Flows, Jun  Survey: —  Prior: $32.9b

Canadian Economic Data

09:00 AM

Existing Home Sales MoM, Jul  Survey: 3.30%  Prior: -0.20%

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 rallying on strong risk-off tone, yields 6- 13 bps lower with the 2s10s curve inverted for the first time since 2007, 10Y yield lowest since 2016 , heavy volume in TY futures (768k), 21K TY contracts trading in a two  minute period once prices broke above Tuesday high was breached (130-17). Global stocks lower o/n while USTs and JPY gained. European equities down 1.75%, US equity futures -1.5%, crude -4.0%.  China industrial production rose at the slowest rate since 2002 in July, while retail sales rose less than exp( 7.6% vs 8.6%). Yest Trump announced a delay of tariffs on certain Chinese goods from Sep1st to Dec 15th to ‘save christmas’.   In Canada, GOCs higher, curve 4bps flatter 2s10s, 10s30s unch  @ 21.5 –  3bps tighter on the week despite the rally in 10s to new lows, yet lagging the 7bp narrowing in US 10s30s.  Long auction at noon – reopening of the Dec 2051s for $1.4bln with the Dec51/48 roll -0.3/-0.5.

News headlines

Stocks Slide, Bonds Flash Warning After Weak Data: Markets Wrap (Bloomberg) American equity-index futures slumped alongside stocks in Europe as weak data from two of the world’s biggest economies overshadowed an apparent de-escalation in the trade war. Treasuries and European bonds rallied, with key parts of both the U.S. and U.K. yield curves inverting.

TSX futures fall on lower crude prices (Reuters) Futures for Canada’s main stock index were down on Wednesday, as oil prices dropped on concerns over weaker economic data from Europe and China.

Oil Retreats After Biggest Jump in Five Weeks as Stockpiles Rise (Bloomberg) Oil declined after its biggest surge in five weeks as an industry report showed American crude stockpiles expanded, paring a rally that was fueled by signs the U.S.-China trade deadlock may be easing.

China industrial output weakens to 17-year low as economy slows (BNN) China posted the weakest industrial output growth since 2002 and slumping retail sales in July, as a cyclical slowdown and trade tensions add to the case to roll out more stimulus

Shrinking German economy ‘on edge of recession’ as exports stutter (Reuters) Slumping exports sent Germany’s economy into reverse in the second quarter, with prospects of an early recovery slim as its manufacturers struggle at the sharp end of a global slowdown amplified by tariff conflicts and fallout from Brexit.

U.S. Treasury bond curve inverts for first time since 2007 in recession warning (Reuters) The U.S. Treasury bond yield curve inverted on Wednesday for the first time since 2007, in a sign of investor concern that the world’s biggest economy could be heading for recession.

Euro zone GDP slows in second-quarter as growth in Germany shrinks (Reuters) The euro zone’s GDP barely grew in the second quarter of 2019, data showed on Wednesday, as economies across the bloc lost steam and the largest, Germany, contracted thanks to a global slowdown driven by trade conflicts and uncertainty over Brexit.

Kremlin says WTO’s existence would be in doubt if U.S., others left (Reuters) The Kremlin said on Wednesday that the existence of the World Trade Organization (WTO) would be in serious doubt if major economies such as the United States left it, a prospect raised a day earlier by U.S. President Donald Trump.

Market Overview: US 10yr note futures are up 0.493% at 130-15, S&P 500 futures are down -1.31% at 2893.5, Crude oil futures are down -2.75% at $55.53, Gold futures are up 0.78% at $1525.9, DXY is down -0.12% at 97.693, CAD/USD is up 0.53% at 0.7522.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.325%	2 Year	1.601%
5 Year	1.171%	5 Year	1.499%
10 Year	1.152%	10 Year	1.589%
30 Year	1.374%	30 Year	2.023%

US Economic Data

07:00 AM	MBA Mortgage Applications, Aug 9  Survey: — Actual: 21.70% Prior: 5.30%
08:30 AM	Import Price Index MoM, Jul  Survey: -0.10% Actual: 0.20%  Prior: -0.90%
	Import Price Index YoY, Jul  Survey: -2.00% Actual: -1.80% Prior: -2.00%
	Export Price Index MoM, Jul  Survey: -0.10% Actual: 0.20%  Prior: -0.70%
	Export Price Index YoY, Jul  Survey: — Actual: -0.90%  Prior: -1.60%

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