Commentaires
06/08/2019
Market Update
US tsys lower, 10Y yields retracing ~4bps of yesterday’s massive 13bp rally on China trade friction (China declared a currency manipulator for the first time since 1994), 10Y 1.75% from low 1.67% overnite, focus on US/China with PBOC saying the Yuan ‘wont keep falling’ , ex-official saying China could sell treasuries (MNI). US equity futures higher (S&P +24), gold unch after two day,3.0% gain surpassing the highs of July 2016. GOCs in catchup mode after yesterday’s close , 10Y below 1.30% a two and a half year low, OIS pricing in 60% chance of a 25bp rate cut, 2s10s back to 9bps inverted with the CAD relatively stable 1.3225 despite weakness in crude/ commodities.
News headlines
China says U.S. currency manipulator labeling could cause chaos in financial markets (Reuters) China’s central bank said on Tuesday that Washington’s decision to label Beijing as a currency manipulator would “severely damage international financial order and cause chaos in financial markets”.
Futures rebound after Wall Street’s worst day of 2019 (Reuters) U.S. stock index futures signaled a bounce on Tuesday, as China stepped in to steady the yuan and investors sought beaten-down stocks, a day after Wall Street’s main indexes racked up their steepest one-day percentage fall of the year.
U.S. Expands Sanctions Against Venezuela Into an Embargo (WSJ) New measures mark a significant escalation of pressure against the regime of President Nicolás Maduro and countries including Russia and China that continue to support him. The Trump administration imposed a total economic embargo against the government of Venezuela, a significant escalation of pressure against the regime of President Nicolás Maduro and countries including Russia and China that continue to support him, a senior administration official said.
The United States and China may be headed for a currency war (CNN) China may have just fired the opening shot of a currency war with the United States. For the first time in more than a decade, Beijing let the yuan weaken past the symbolically important level of 7 to the dollar on Monday. The Chinese central bank said the move mostly reflected market concern about « trade protectionism and new tariffs on China. » President Donald Trump escalated the trade war last week by announcing that the United States would tax just about every Chinese export starting in September.
NEB gives green light for Trans Mountain expansion construction to begin (BNN) The National Energy Board says Trans Mountain can begin construction at three major facility sites, providing approvals the company said it needed to meet its deadline for shovels to get in the ground. BNN Bloomberg’s Tara Weber has the details.
Toronto home sales rise 24.3% in July; prices rise amid tighter supply (BNNBloomberg) The Greater Toronto Area’s home price index was up 4.4 per cent last month as the supply of properties for sale tightened and the number of sales jumped 24.3 per cent from July last year, the Toronto Real Estate Board reports. The overall average selling price for properties in the Greater Toronto Area was up 3.2 per cent year-over-year to $806,755, TREB said in a monthly report issued Tuesday. The number of properties sold increased to 8,595 from 6,916, with sales of all four categories of housing up by double digits.
Fitch analysts don’t see grounds for panic over Canadian debt (BNNBloomberg) An Aug. 2 report on asset-backed securities from Fitch Ratings, which analyzes credit card payments, indicates consumers are coping with record debt levels and concluded the “stable performance” should continue. Though charge-offs, or receivables that have been written off as noncollectable, hit a two-year high in May, the year-to-date average is little changed from 2018. Meanwhile, delinquencies of more than 60 days actually declined in the second quarter, and the monthly payment rate increased
Former Fed chiefs unite in call on Trump to end Powell threats (BNNBloomberg) Four former Federal Reserve chiefs made a joint plea for the central bank to be able to operate without political pressures or the threat of removal of its leaders, responding to President Donald Trump’s persistent attacks on current Chairman Jerome Powell.
Global stocks rebound after China calms currency markets (CNN) Stocks in Asia clawed back some of their losses and US stock futures rebounded on Tuesday after China took steps to shore up the falling yuan. Major Asian markets still ended Tuesday in the red: Hong Kong’s Hang Seng Index (HSI) finished down 0.7%, while Japan’s Nikkei closed 0.7% lower. China’s Shanghai Composite Index (SHCOMP) lost 1.6%. South Korea’s Kospi (KOSPI) fell 1.5%. Taiwan’s Taiex settled lower by 0.3%. But they recovered significantly from earlier in the day, when all of those indexes fell by more than 2%.
Market Overview: US 10yr note futures are down -0.132% at 129-22, S&P 500 futures are up 0.98% at 2857.75, Crude oil futures are up 0.71% at $55.08, Gold futures are up 0.05% at $1477.2, DXY is up 0.11% at 97.634, CAD/USD is up 0.13% at 0.7562.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.388% | 2 Year | 1.599% |
| 5 Year | 1.265% | 5 Year | 1.554% |
| 10 Year | 1.292% | 10 Year | 1.75% |
| 30 Year | 1.544% | 30 Year | 2.297% |
US Economic Data
| 10:00 AM | JOLTS Job Openings June Survey: 7326 Prior: 7323 |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Aug 2 Prior: 58.2 |
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
02/08/2019
Market Update
US tsys continuing higher after Trump’s new round of China tariffs, and China’s pledge to retaliate, the US 10Y 1.86% (-3.5bps), lowest since Nov 2016. Long term bunds at new low yields with the 10Y bund -0.50% and the 30Y at zero for the first time. July Non farm payrolls expected at 165k vs 224k with the unemployment rate forecast to fall further to 3.6%, a new low. GOCs lagging tsys by 5-7bps since yesterday’s rally, 10Y 1.39%. Trade data for June expected to show reversal to a $300mln deficit from the $760mln surplus recorded in May. CAD weaker for a 3rd day, 1.3245 in the wake of broad based strength in the USD, weakness in commodities, thou crude has rebounded somewhat from yesterday’s huge losses.
News headlines
Stocks Slump, Bonds Rally as Trade Tensions Rise: Markets Wrap (Bloomberg) Stocks slumped and bonds rallied in the wake of President Donald Trump’s move to escalate the trade war, with China pledging “countermeasures” if the U.S. steps up tariffs on its goods.
TSX futures set to open lower on fresh Trump tariff threat (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Friday after U.S. President Donald Trump rattled global markets with fresh tariff threats on China.
Oil Set for Weekly Loss After Biggest Slump in 4 Years on Tariff (Bloomberg) Oil is set for a weekly loss after the steepest one-day drop in more than four years as U.S. President Donald Trump abruptly escalated the trade war with China, deepening concerns over slowing growth.
China pledges countermeasures as Trump escalates trade war again (BNN) Beijing pledged to respond if the U.S. insists on adding extra tariffs to the remainder of Chinese imports, after President Donald Trump’s abrupt escalation of the trade war.
U.S. pulls out of Soviet-era nuclear missile pact with Russia (Reuters) The United States formally withdrew from a landmark nuclear missile pact with Russia on Friday after determining that Moscow was in violation of the treaty, something the Kremlin has repeatedly denied.
Fed, trade confusion upending Wall Street investment playbooks (Reuters) As Federal Reserve Chair Jerome Powell on Wednesday described why the central bank’s interest rate cut should not be seen as the start of a lengthy easing cycle, the U.S. stock market was losing value at a rate of over $25 billion a minute.
U.S. employment growth seen slowing in July; wage gains steady (Reuters) U.S. job growth likely slowed in July after outsized gains in the prior month, with wages probably maintaining their moderate pace of increase, which could boost market expectations for another interest rate cut from the Federal Reserve next month.
Entire German govt bond yield curve turns negative for first time (Reuters) The 30-year German government bond yield turned negative for the first time ever on Friday, leaving the euro zone member’s entire yield curve in negative territory as investors scrambled for safer assets.
Market Overview: US 10yr note futures are up 0.182% at 128-30, S&P 500 futures are down -0.36% at 2941.5, Crude oil futures are up 2.56% at $55.33, Gold futures are up 1.22% at $1449.9, DXY is down -0.18% at 98.196, CAD/USD is up 0.07% at 0.7564.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.466% | 2 Year | 1.71% |
| 5 Year | 1.358% | 5 Year | 1.657% |
| 10 Year | 1.385% | 10 Year | 1.855% |
| 30 Year | 1.615% | 30 Year | 2.395% |
US Economic Data
| 08:30 AM | Change in Nonfarm Payrolls, Jul Survey: 165k Prior: 224k |
| Change in Private Payrolls, Jul Survey: 165k Prior: 191k | |
| Change in Manufact. Payrolls, Jul Survey: 5k Prior: 17k | |
| Unemployment Rate, Jul Survey: 3.60% Prior: 3.70% | |
| Average Hourly Earnings MoM, Jul Survey: 0.20% Prior: 0.20% | |
| Average Hourly Earnings YoY, Jul Survey: 3.10% Prior: 3.10% | |
| Trade Balance, Jun Survey: -$54.6b Prior: -$55.5b | |
| 10:00 AM | Factory Orders, Jun Survey: 0.70% Prior: -0.70% |
| Durable Goods Orders, Jun F Survey: — Prior: 2.00% | |
| Durables Ex Transportation, Jun F Survey: — Prior: 1.20% | |
| Cap Goods Orders Nondef Ex Air, Jun F Survey: — Prior: 1.90% | |
| Cap Goods Ship Nondef Ex Air, Jun F Survey: — Prior: 0.60% | |
| U. of Mich. Sentiment, Jul F Survey: 98.5 Prior: 98.4 |
Canadian Economic Data
| 08:30 AM | Int’l Merchandise Trade, Jun Survey: -0.30b Prior: 0.76b |
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
01/08/2019
Market Update
US tsys lower but recouping most of o/n losses, US10Y 2.02% (+1bp), strong volume in TY futures (460k). Belly of tsy curve leading slight losses after FOMC decision to lower Fed Funds 25bps without clear signal of further cuts to follow. UK going against the grain of higher global yields after BOE decision, gilts bid on Carney warning of no-deal Brexit impact on growth, GBP falling to fresh lows, Carney warning no-deal could push pound to record lows. GOCs lower, 1bp wider vs tsys, Can/US 10Y 8bps cheaper since last week, 3bps after yest stronger GDP. Today the BOC auctions $2.4bln in reopened Sep 2022s.
News headlines
Dollar Extends Post-Fed Gains; Treasuries Retreat: Markets Wrap (Bloomberg) The dollar extended an advance on Thursday and Treasuries gave back some gains from a day earlier as investors digested the first U.S. rate cut in a decade and the Federal Reserve’s message there may not be many more. S&P 500 futures edged higher and European equities rose.
TSX futures up as focus turns to earnings (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Thursday as investors parsed through a host of major company earnings.
Mind your backs, dollar coming through! (Reuters) The dollar charged to its highest in more than two years on Thursday after the Federal Reserve spoiled hopes of a run of U.S. interest rate cuts.
Factory pain spreads through Asia, Europe; stimulus expected (Reuters) Factory activity contracted across Asia and Europe in July, fuelling worries a prolonged U.S.-China trade war and an economic slowdown could tilt the world toward recession, which central banks would have to fight with depleted ammunition.
Oil Slides as Dollar Strengthens After Fed’s Cautious Rate Cut (Bloomberg) Oil retreated from a two-week high after the Federal Reserve said its interest rate cut was an isolated move, boosting the dollar and dimming demand for commodities priced in the U.S. currency.
Powell says Fed cut not start of long series, drawing Trump ire (BNN) Federal Reserve Chairman Jerome Powell said the first interest rate cut since the financial crisis was to “insure against downside risks” but didn’t signal the start of a lengthy easing cycle, drawing a sharp rebuke from President Donald Trump.
China sees intensive contact with U.S. this month ahead of September trade talks (Reuters) Chinese and U.S. working teams will be in intensive contact this month to prepare “good groundwork” for the next round of face-to-face trade talks in September, the commerce ministry said on Thursday.
Bank of England cuts growth forecasts as Brexit and global worries mount (Reuters) The Bank of England cut its growth forecasts on Thursday in the face of increased Brexit worries and a slowing global economy, but gave no indication it was considering lowering interest rates like other central banks.
Market Overview: US 10yr note futures are down -0.098% at 127-10, S&P 500 futures are up 0.08% at 2984.75, Crude oil futures are down -1.28% at $57.83, Gold futures are down -1.47% at $1416.6, DXY is up 0.37% at 98.877, CAD/USD is up 0.24% at 0.7562.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.571% | 2 Year | 1.888% |
| 5 Year | 1.483% | 5 Year | 1.855% |
| 10 Year | 1.51% | 10 Year | 2.04% |
| 30 Year | 1.722% | 30 Year | 2.54% |
US Economic Data
| 07:30 AM | Challenger Job Cuts YoY, Jul Survey: — Actual: 43.20% Prior: 12.80% |
| 08:30 AM | Initial Jobless Claims, Jul 27 Survey: 214k Actual: 215k Prior: 206k |
| Continuing Claims, Jul 20 Survey: 1674k Actual: 1699k Prior: 1676k | |
| 09:45 AM | Bloomberg Consumer Comfort, Jul 28 Survey: — Prior: 63.7 |
| Markit US Manufacturing PMI, Jul F Survey: 50.1 Prior: 50.0 | |
| 10:00 AM | ISM Manufacturing, Jul Survey: 52.0 Prior: 51.7 |
| ISM Prices Paid, Jul Survey: 49.0 Prior: 47.9 | |
| Construction Spending MoM, Jun Survey: 0.30% Prior: -0.80% |
Canadian Economic Data
| 09:30 AM | Markit Canada Manufacturing PMI, Jul Survey: — Prior: 49.2 |
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