Commentaires matinaux

Market Update

US tsys slightly lower before July CPI, US 10Y 1.65%, having erased earlier gains, strong volume in TY futures (~600k). Long term tsys continuing to outperform, after well-received UK 30Y auction, 30Y tsy yield fell to 2.095% within 1bp of 2016 record low 2.088% . Situation in Hong Kong escalating with flights cancelled, also a huge miss in ZEW confidence (-13.5 vs -6.3) – German bund curve 4bps flatter.  In Canada, GOCs mostly unch, 10s30s flatter for second day in line with global flattening.

News headlines

Stocks Retreat Amid Hong Kong, Argentina Turmoil: Markets Wrap (Bloomberg) U.S. equity futures struggled for direction after stocks fell in Europe and slumped in Asia as turmoil in Hong Kong and Argentina spooked investors already on edge over the trade war. The dollar was steady as gold and silver rallied.

TSX futures point to flat opening (Reuters) Futures for Canada’s main stock index were little changed on Tuesday, as gains in gold prices were countered by lower oil.

Oil Steadies Near $55 as Demand Fears Mix With Tighter Supply (Bloomberg) Oil steadied near $55 a barrel in New York as persistent concerns over slowing demand jostled with expectations that U.S. crude stockpiles will continue to tighten.

Exclusive: Yuan at right level, disorderly capital flows unlikely – China central bank official (Reuters) China’s yuan is at an appropriate level currently and two-way fluctuations in the currency will not necessarily cause disorderly capital flows, a senior official at the People’s Bank of China told Reuters on Tuesday.

U.S. President Trump asked Japan PM to buy farm products: Kyodo (Reuters) U.S. President Donald Trump has directly asked Japanese Prime Minister Shinzo Abe to buy farm products worth a ‘huge amount’, Kyodo news agency reported on Tuesday, citing unidentified Japanese and U.S. government sources.

Draghi’s parting gift to tie Lagarde’s hands (Reuters) The European Central Bank’s imminent stimulus package is unlikely to cut record low borrowing costs much further but will tie its new president’s hands for much of the next year, giving her little leeway to act while the economy ails.

PRECIOUS-Gold hits more than 6-year high on Hong Kong, Argentina (Reuters) Gold hit a more than six-year high on Tuesday as unrest in Hong Kong and a rout in the Argentine peso drove investors already spooked by the U.S.-China trade war into havens such as bullion at the expense of riskier assets such as stocks.

Market Overview: US 10yr note futures are down -0.096% at 130-08, S&P 500 futures are down -0.28% at 2872.25, Crude oil futures are down -0.96% at $54.4, Gold futures are up 1.25% at $1536.2, DXY is up 0.02% at 97.401, CAD/USD is up 0.21% at 0.7537.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.326%	2 Year	1.592%
5 Year	1.195%	5 Year	1.504%
10 Year	1.188%	10 Year	1.644%
30 Year	1.434%	30 Year	2.116%

US Economic Data

06:00 AM	NFIB Small Business Optimism, Jul  Survey: 104.0  Actual: 104.7 Prior: 103.3
08:30 AM	CPI MoM, Jul  Survey: 0.30%  Prior: 0.10%
	CPI Ex Food and Energy MoM, Jul  Survey: 0.20%  Prior: 0.30%
	CPI YoY, Jul  Survey: 1.70%  Prior: 1.60%
	CPI Ex Food and Energy YoY, Jul  Survey: 2.10%  Prior: 2.10%
	CPI Core Index SA, Jul  Survey: 263.302  Prior: 262.803
	CPI Index NSA, Jul  Survey: 256.441  Prior: 256.143
	Real Avg Hourly Earning YoY, Jul  Survey: —  Prior: 1.50%
	Real Avg Weekly Earnings YoY, Jul  Survey: —  Prior: 1.20%

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

Market Update

US tsys stronger, yields 5-6bps lower with the 10Y 1.69% (-5.5bps).  European equities erased earlier gains, US equity futures  -0.5% on avg volume in TY futures (350k). Escalating tensions and an upset defeat for President Macri in Argentina’s primary election. Quiet on the US data front today, July CPI tomorrow and Retail Sales on Thursday the highlights for the week. GOCs lagging the rise in tsys by ~1bp,  the BOC will auction $1.4bln Dec 2051s on Wednesday with the 51/48 roll fairly flat after having reached 1bp thru in early July, prior to the huge FTQ rally which has been lead by 10s and has seen 10s30s resteepen  by 10bps.

News headlines

U.S. Stock Futures Decline as Hong Kong Sours Mood: Markets Wrap (Bloomberg) U.S. equity futures reversed an advance on Monday alongside European stocks as mounting unrest in Hong Kong weighed on investor sentiment. Treasuries and the yen extended gains while gold and the dollar both turned higher.

TSX futures drop as trade war, recession worries weigh (Reuters) Futures for Canada’s main stock index pointed to a lower opening on Monday, as oil prices dropped amid worries of an economic slowdown and a year-long Sino-U.S. trade tariff tussle.

Oil Declines as Trade Tensions Continue to Stoke Demand Fears (Bloomberg) Oil dropped as U.S. President Donald Trump said planned trade talks with China next month could be called off, stoking concerns the deepening dispute will damage global growth.

U.S. adviser Bolton courts Brexit Britain with a trade deal talk (Reuters) U.S. President Donald Trump wants to see a successful British exit from the European Union that Washington will support with a U.S.-UK free trade agreement, national security adviser John Bolton told British officials on Monday.

Fed remains a target as economy falls short of Trump’s ambitious goals (Reuters) It has become a jarring and frequent contradiction. President Donald Trump blames the Federal Reserve for putting the U.S. economy at risk while data shows an economy in “reasonably good” shape, as the head of the central bank recently said.

Global economic outlook darkens amid escalating trade dispute, Ifo says (Reuters) The economic outlook has deteriorated worldwide as the trade dispute between the United States and China escalates, a survey showed on Monday.

Goldman Sachs economists say fears rise that U.S.-China trade war leading to recession (Reuters) Goldman Sachs Group Inc (GS.N) said on Sunday that fears of the U.S.-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 U.S. presidential election.

Market Overview: US 10yr note futures are up 0.241% at 130-00, S&P 500 futures are down -0.55% at 2903.75, Crude oil futures are down -0.75% at $54.09, Gold futures are up 0.48% at $1515.8, DXY is up 0.05% at 97.537, CAD/USD is up 0.08% at 0.7558.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.348%	2 Year	1.598%
5 Year	1.223%	5 Year	1.524%
10 Year	1.226%	10 Year	1.69%
30 Year	1.479%	30 Year	2.204%

US Economic Data

02:00 PM

Monthly Budget Statement, Jul  Survey: -$120.0b  Prior: -$76.9b

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Aug 9  Survey: —  Prior: 58.6

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 1-2bps lower, 10Y 1.72%, heavy volume in TY futures (570k).  US equity futures higher, S&P sideways since early Asia trading (+8.5), crude extending yesterday’s recovery after Saudis announced plans to support prices. China stabilized its currency by fixing the yuan at stronger level than exp (7.0039 vs 7.0156 according to BN). Focus on today’s US $19bln 30Y auction after weak 10Y yest ( 1.67 vs 1.653 WI).  In Canada, GOCs outperforming tsys 1-2bps out the curve, 10Y 1.20%. Yesterday’s intraday low on 10s 1.13% prior to the Saudi announcement, recovery in stocks and a rare onslaught of afternoon corp supply – $2bln across 4 issues including a Sun Life 10NC5 @ 117 and two tranche Enbridge Gas 10s &30s.

News headlines

Stocks Rise With Yuan, Oil; Gold Dips Below $1,500: Markets Wrap (Bloomberg) U.S. equity futures edged higher while European and Asian stocks advanced with the yuan after China’s stronger-than-expected daily fixing of its currency eased fears about a worsening trade conflict. Gold slipped from a six-year high.

TSX futures point to flat opening (Reuters) Futures for Canada’s main stock index were little changed on Thursday, a day after ending a week-long losing streak as calm returned to global markets.

China surprises with best export growth since March, but imports remain weak (Reuters) China’s exports unexpectedly returned to growth in July on improved global demand despite escalating U.S. trade pressure, but the rebound may be short-lived as Washington prepares to slap even more tariffs on Chinese goods.

China continued Iran oil imports in July in teeth of U.S. sanctions: analysts (Reuters) China imported Iranian crude oil in July for the second month since a U.S. sanctions waiver ended, according to research from three data firms, with one estimate showing some oil entered tanks holding the country’s strategic reserves.

Japan greenlights first South Korea export since July curbs, but with a warning (Reuters) Japan has approved shipment of a high-tech material to South Korea for the first time since imposing export curbs last month, but doubled down on political pressure and warned it could broaden restrictions on deliveries to its Asian neighbor.

Rate cuts, China data caps dollar gains (Reuters) The dollar steadied on Thursday as risk sentiment rose after resilient Chinese trade data and as Beijing’s efforts to slow a slide in the value of the renminbi encouraged investors to buy riskier currencies.

Oil rebounds from seven-month low as Saudis seek to stem slide (BNN) Oil rebounded from the lowest level since January after Saudi Arabia contacted other producers to discuss options to stem a rout that’s been driven by the worsening U.S.-China trade war.

Market Overview: US 10yr note futures are down -0.204% at 129-29, S&P 500 futures are up 0.25% at 2887.75, Crude oil futures are up 1.82% at $52.02, Gold futures are down -0.66% at $1509.5, DXY is up 0.11% at 97.649, CAD/USD is down -0.03% at 0.7519.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.344%	2 Year	1.597%
5 Year	1.204%	5 Year	1.531%
10 Year	1.214%	10 Year	1.717%
30 Year	1.462%	30 Year	2.234%

US Economic Data

08:30 AM	Initial Jobless Claims, Aug 3  Survey: 215k  Prior: 215k
	Continuing Claims, Jul 27  Survey: 1690k  Prior: 1699k
09:45 AM	Bloomberg Consumer Comfort, Aug 4  Survey: —  Prior: 64.7
10:00 AM	Wholesale Trade Sales MoM, Jun  Survey: 0.20%  Prior: 0.10%
	Wholesale Inventories MoM, Jun F  Survey: 0.20%  Prior: 0.20%

Canadian Economic Data

08:30 AM	New Housing Price Index MoM, Jun  Survey: 0.00%  Prior: -0.10%
	New Housing Price Index YoY, Jun  Survey: -0.10%  Prior: 0.00%

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