Comments
10/07/2019
Market Update
US tsys trading higher, reversing losses after Powell testimony released pointing to July rate cut after opening after steep declines in European bonds, 10Y 2.05% (-1.5bps). Bunds & gilts paring losses on after better than expected France & Italian IP data, as well as a weak German 10Y auction. In Canada, GOCs lower lagging the recovery in tsys, 10Y 1.59% close to a six-week high. GOC curve steepening yesterday the main theme, 2s10s closed at -6bps after dipping below -11bps in the morning. BOC decision at 10:00am & MPR – Poloz expected to point to resiliency in the Cdn economy, Q2 growth outlook much impoved since April, full year growth should be revised higher as well.
News headlines
Fed’s Powell says trade, global growth concerns continue to weigh on U.S. economy (Reuters) Concerns about trade policy and a weak global economy “continue to weigh on the U.S. economic outlook” and the Federal Reserve stands ready to “act as appropriate” to sustain a decade-long expansion, Fed Chairman Jerome Powell said on Wednesday in remarks that could bolster expectations of an interest rate cut later this month.
TSX futures lower ahead of BoC rate decision, Powell testimony (Reuters) Canada’s main stock index futures edged lower on Wednesday ahead of Bank of Canada’s interest rate decision and U.S. Federal Reserve Chairman Jerome Powell’s congressional testimony.
U.S. Futures Rise With Gold, Bonds on Rate Bets: Markets Wrap (Bloomberg) U.S. stock futures turned higher with Treasuries after Jerome Powell signaled an openness to rate cuts amid ongoing uncertainty in the economy. Gold rose and the dollar fell.
Oil Jumps on Report of Falling U.S. Stockpiles and Iran Tension (Bloomberg) Oil jumped to the highest in a week as an industry report showing a continued draw-down in U.S. crude inventories tightened a supply outlook that’s being threatened by rising tension in the Middle East.
China to reduce tariffs, improve export tax rebate policies (Reuters) China will stabilize trade by reducing tariffs, improving export tax rebate policies and cutting insurance fees for export companies, state television reported on Wednesday, citing a state council meeting chaired by Premier Li Keqiang.
China warns meat exporters to comply with rules: sources (Reuters) China’s customs administration warned meat exporting nations this week to comply with its rules on imports, following a series of problems it identified in Canadian pork shipments.
China’s Looming Deflation Fears Strengthen Policy Easing Case (Bloomberg) The case for Chinese policy makers to ramp up stimulus grew stronger, as tepid domestic demand and falling commodity prices increase the risk of a return to factory deflation.
Bank of Canada’s Poloz likely to rebuff global easing trend (BNN) A strong run of economic data is affording the Bank of Canada an opportunity Wednesday to resist any dovish turn in global monetary policy.
Market Overview: US 10yr note futures are down -0.233% at 127-00, S&P 500 futures are down -0.23% at 2975.25, Crude oil futures are up 2.28% at $59.15, Gold futures are down -0.34% at $1395.8, DXY is down -0.05% at 97.437, CAD/USD is down -0.12% at 0.7626.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.661% | 2 Year | 1.919% |
| 5 Year | 1.594% | 5 Year | 1.901% |
| 10 Year | 1.622% | 10 Year | 2.096% |
| 30 Year | 1.765% | 30 Year | 2.577% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, Jul 5 Survey: — Actual: -2.40% Prior: -0.10% |
| 10:00 AM | Wholesale Inventories MoM, May F Survey: 0.40% Prior: 0.40% |
| Wholesale Trade Sales MoM, May Survey: 0.30% Prior: -0.40% | |
| 02:00 PM | FOMC Meeting Minutes, Jun 19 |
Canadian Economic Data
| 10:00 AM | Bank of Canada Rate Decision, Jul 10 Survey: 1.75% Prior: 1.75% |
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
09/07/2019
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
08/07/2019
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 31st 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