Commentaires matinaux

Market Update

US tsys trading lower, 10Y 2.055% (+1bp), on heavier volume in TY futures (450k), despite weaker equities (S&P -10).  Fed chair Powell to speak on ‘stress tests’ before key testimony tomorrow. Core EGBs mixed, gilts outperforming, focus on the launch of the 2041 linker with strong order books (Stg20bln vs Stg2.5 bln allocated).  Italy 6bps tighter vs Germany – Italy 50Y BTP auction also way oversubscribed (E17bln vs E3bln offering).  In Canada, GOCs slightly higher, 1bp tighter vs tsys. The GOC curve continuing to flatten before the BOC tomorrow – 2s5s reaching below -11bps yesterday aft.  The BOC expected to stick with its neutral bias, with the outloook for near term growth having greatly improved since the April MPR – the latest Bloomberg consensus is for 2.2% in Q2 vs 1.3% BOC forecast, thou trade worries should temper some of the Bank’s optimism.

News headlines

U.S. Futures, Europe Stocks Slide; Treasuries Dip: Markets Wrap (Bloomberg) U.S. stock futures and European shares retreated alongside Asian equities as markets extended a downbeat start to the week. The dollar strengthened for a third day.

TSX futures lower as gold prices ease (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Tuesday, weighed down by falling gold prices.

Oil Steadies Before Fed Testimony While Mideast Risks Linger (Bloomberg) Oil steadied near $58 a barrel in New York as investors awaited guidance from the Federal Reserve on interest rates and as tensions in the Persian Gulf maintained the risk of supply disruption.

U.S., China to relaunch talks with little changed since deal fell apart (Reuters) The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed.

Deutsche Bank shares slide again on skepticism about turnaround (Reuters) Deutsche Bank DKBGn.DE shares extended losses on Tuesday on investor doubts that the new chief executive can revive the lender by shrinking the investment bank and returning to its roots as banker to corporate Germany.

Canada pushes to get China meat exports resumed this week (BNN) Canadian authorities are hoping to convince China to lift a ban on meat shipments as early as this week, according to livestock groups.

Bitcoin near two-week highs, fueled by hopes for Facebook’s Libra (Reuters) Bitcoin held on Tuesday near its highest for two weeks after surging as much as 9% overnight, a move analysts said was probably driven by hopes that cryptocurrencies are gaining wider acceptance after Facebook disclosed plans for a digital coin.

Market Overview: US 10yr note futures are down -0.233% at 127-07, S&P 500 futures are down -0.34% at 2968.25, Crude oil futures are up 0.52% at $57.96, Gold futures are down -0.44% at $1393.9, DXY is up 0.2% at 97.577, CAD/USD is up 0.22% at 0.7619.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.675%	2 Year	1.907%
5 Year	1.576%	5 Year	1.877%
10 Year	1.586%	10 Year	2.065%
30 Year	1.735%	30 Year	2.54%

US Economic Data

06:00 AM	NFIB Small Business Optimism, Jun  Survey: 103.1  Actual: 103.3 Prior: 105.0
10:00 AM	JOLTS Job Openings, May  Survey: 7473  Prior: 7449

Canadian Economic Data

08:15 AM	Housing Starts, Jun  Survey: 208.6k Actual: 245.7k  Prior: 202.3k
08:30 AM	Building Permits MoM, May  Survey: -10.00%  Prior: 14.70%

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 slightly higher having given up earlier gains on weakness in equities (Deutsche Bank news, Fed repricing) to trade close to lows of session, 10Y 2.03%  on avg volume in TY futures (380k).  Core Euro bonds higher led by 10Y UK gilts 0.695% (-4bps) – Boris Johnson saying the UK will leave the EU without a deal by the Oct 31^st deadline.  GOCs continuing lower, curve flatter, another 2bps wider vs tsys, despite headline weakness in Cdn employment the details were strong-  full time employment up 25k and wages +3.6%, the CAD close to six month highs from Friday @ 1.3050.  BOC not expected to adjust its bias in favor of easing at this week’s meeting  yet could boost the outllook for Q2 growth and inflation given the improvement in recent data.

News headlines

U.S. Futures, Europe Stocks Struggle; Gold Climbs: Markets Wrap (Bloomberg) U.S. equity futures edged lower and Europe stocks drifted following steep declines in Asia as investors kicked off the busy week in a cautious mood. Gold advanced.

TSX futures lower as U.S. rate cut hopes fade (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Monday, as investors scaled back expectations for a hefty rate cut by the U.S. Federal Reserve.

Poloz’s comfort level with stronger loonie faces a test (BNN) Bank of Canada Governor Stephen Poloz may have reason to start worrying about the strengthening Canadian dollar when he sets interest rates this week.

Oil Holds Above $57 as Iran Tension Keeps Investors Wary (Bloomberg) Oil held above $57 as rising tension in the Middle East kept investors wary of potential supply disruptions.

Global shares muted as prospect of sharp U.S. rate cut fades (Reuters) Global shares were in a muted mood on Monday after strong U.S. job gains tempered expectations the Federal Reserve will deliver a large rate cut, but Deutsche Bank gained nearly 4% as it launched a major restructuring.

EU working to get European candidate to replace Lagarde at IMF, official says (Reuters) The European Union wants to have an agreed European candidate to replace Christine Lagarde at the helm of the International Monetary Fund, a senior EU official said on Monday.

German Industry Gets Some Relief as Production Rises in May (Bloomberg) German industrial production saw a slight pick-up in May — a rare sign of resilience as manufacturers in Europe’s largest economy struggle with global trade tensions and subdued demand.

Market Overview: US 10yr note futures are up 0.037% at 127-17, S&P 500 futures are down -0.22% at 2984, Crude oil futures are down -0.19% at $57.4, Gold futures are up 0.51% at $1407.2, DXY is up 0.02% at 97.306, CAD/USD is down -0.13% at 0.7656.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.633%	2 Year	1.87%
5 Year	1.542%	5 Year	1.834%
10 Year	1.575%	10 Year	2.037%
30 Year	1.742%	30 Year	2.538%

US Economic Data

03:00 PM

Consumer Credit, May  Survey: $17.000b  Prior: $17.497b

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Jul 5  Survey: —  Prior: 58.3

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

Tsy yields higher ahead of June payrolls, 10Y 1.97% (+2bps), on avg volume in TY futures (335k). Core EGBs also lower, 10Y bund -0.39% vs -0.41% record intraday low yest. Main European data was German factory orders which declined 2.2% m/m vs -0.2% exp.  GOCs lower before June Cdn employment (10k exp vs 27.7k in May). Can/US spreads another 1-2bps wider yest, GOCs continuing their underperformance  in the face of divergent economic indicators.

News headlines

Stocks Slip Ahead of U.S. Jobs Data; Dollar Gains: Markets Wrap (Bloomberg) U.S. stock futures were lower along with Treasuries before the key U.S. jobs report. The dollar strengthened and crude oil fell.

TSX futures lower ahead of U.S. jobs data (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Friday ahead of the release of a crucial U.S. jobs report, which could offer some guidance on the U.S. Federal Reserve’s interest rate decision due later this month.

Oil Set for Weekly Decline as Economic Woes Eclipse OPEC Curbs (Bloomberg) Oil is set for the biggest weekly decline since May as global demand concerns outweighed an OPEC+ pact to extend supply curbs into 2020 and worries that a renewed confrontation with Iran may threaten supplies.

Sinking yields puts euro on track for biggest weekly drop in 3 weeks (Reuters) The euro fell a fifth of a percent against the dollar on Friday and is set for its biggest weekly drop in three weeks as a relentless slide in government bond yields forced investors to look for higher-yielding assets elsewhere.

Venezuela says U.S. sanctions hit debt refinancing, oil sales (Reuters) Venezuela charged on Friday that U.S.-led sanctions had stopped foreign debt refinancing, blocked vital food and medicine imports, and cost billions of dollars in lost oil assets.

UK economy shows slowdown signs as recruiters, shoppers turn wary (Reuters) British employers and shoppers are turning increasingly cautious, indicators showed on Friday, suggesting two of the drivers of the economy during the Brexit crisis are losing momentum.

World stocks cling to gains, bonds hover ahead of U.S. payrolls (Reuters) World stocks clung to their 17-month highs on Friday and bonds paused after this week’s rally ahead of U.S. jobs data, a gauge that could stoke or temper market expectations about aggressive policy easing by the Federal Reserve.

Market Overview: US 10yr note futures are down -0.134% at 128-03, S&P 500 futures are down -0.17% at 2995, Crude oil futures are down -0.8% at $56.88, Gold futures are down -0.5% at $1413.8, DXY is up 0.18% at 96.942, CAD/USD is up 0.1% at 0.7653.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.546%	2 Year	1.786%
5 Year	1.451%	5 Year	1.758%
10 Year	1.495%	10 Year	1.967%
30 Year	1.684%	30 Year	2.478%

US Economic Data

08:30 AM	Change in Nonfarm Payrolls, Jun  Survey: 160k  Prior: 75k
	Change in Private Payrolls, Jun  Survey: 150k  Prior: 90k
	Change in Manufact. Payrolls, Jun  Survey: 3k  Prior: 3k
	Unemployment Rate, Jun  Survey: 3.60%  Prior: 3.60%
	Average Weekly Hours All Employees, Jun  Survey: 34.4  Prior: 34.4
	Labor Force Participation Rate, Jun  Survey: 62.80%  Prior: 62.80%
	Underemployment Rate, Jun  Survey: —  Prior: 7.10%

Canadian Economic Data

08:30 AM	Net Change in Employment, Jun  Survey: 9.9k  Prior: 27.7k
	Unemployment Rate, Jun  Survey: 5.50%  Prior: 5.40%
	Participation Rate, Jun  Survey: 65.70  Prior: 65.70
	Full Time Employment Change, Jun  Survey: —  Prior: 27.7
	Part Time Employment Change, Jun  Survey: —  Prior: 0.0
10:00 AM	Ivey Purchasing Managers Index SA, Jun  Survey: —  Prior: 55.9

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