Commentaires

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

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