Commentaires

Market Update

US tsys higher, thou prices have pulled back since early European trading , TY futures at the lows of the session despite weaker June ADP (102k vs 140k) and ahead of early close, the 10Y reached a low 1.935%, now 1.95% . Global bonds continuing to rally , core EGB curves flattening. Gilt yields 2-4bps lower after weaker than expected UK services PMI. Yesterday’s appointment of Christine Lagarde as ECB head was seen as dovish by mkts according to MNI. GOCs lagging the rally in tsys, spreads another 2-3bps wider yesterday. Today the BOC auctions $4.0bln reopened 1.5% Sep 24s with the Sep 24/Mar 24 roll now -0.1bps.

News headlines

U.S. Yields Hit Lowest Since 2016 as Stocks Rise: Markets Wrap (Bloomberg) Bonds extended gains globally ahead of the U.S. holiday as investors weighed the prospect of more dovish appointees to two of the world’s major central banks. Stocks in Europe rose with U.S. equity futures, while those in Asia were mostly lower.

TSX set to open higher as oil prices rebound (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Wednesday, as oil prices rebounded after a steep fall in the previous session.

Oil Edges Higher as Inventory Drop Helps to Ease Post-OPEC Gloom (Bloomberg) Oil gained after suffering its worst reaction to an OPEC meeting in more than four years.

No technocrat, Lagarde brings listening, diplomacy to ECB table (Reuters) Christine Lagarde will raise the profile of the European Central Bank, making it a more politically-savvy institution that takes its message directly to the people. However policy innovation, the trademark of her predecessor, may be relegated.

Euro zone June business growth slow as factories still faltering (Reuters) Euro zone business activity picked up slightly last month but remained weak as a modest but broad-based upturn in the services industry offset a continued deep downturn in factory output, a survey showed.

U.S. 10-year yields hold near lowest since Nov 2016 (Reuters) The yields on U.S. 10-year Treasury notes hovered above their lowest level since November 2016 on Wednesday in advance of a report on private U.S. employment from payroll processor ADP, which analysts forecast a rebound in company hiring in June.

Trump picks two Fed nominees likely to support easier policy (BNN) After a yearlong assault on the Federal Reserve and its chairman, President Donald Trump has tapped two wildly different economists to the central bank’s board who seemingly have one important thing in common.

Market Overview: US 10yr note futures are up 0.11% at 128-09, S&P 500 futures are up 0.2% at 2985.5, Crude oil futures are up 0.84% at $56.72, Gold futures are up 1.01% at $1422.2, DXY is down -0.01% at 96.717, CAD/USD is down -0.05% at 0.7634.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.472%	2 Year	1.748%
5 Year	1.396%	5 Year	1.727%
10 Year	1.45%	10 Year	1.952%
30 Year	1.661%	30 Year	2.484%

US Economic Data

07:00 AM	MBA Mortgage Applications, Jun 28  Survey: —  Actual: -0.10% Prior: 1.30%
08:15 AM	ADP Employment Change, Jun  Survey: 140k Actual: 102k  Prior: 27k
	Trade Balance, May  Survey: -$54.0b  Prior: -$50.8b
	Initial Jobless Claims, Jun 29  Survey: 223k  Prior: 227k
	Continuing Claims, Jun 22  Survey: 1675k  Prior: 1688k
09:45 AM	Bloomberg Consumer Comfort, Jun 30 Survey: —  Prior: 63.6
	Markit US Services PMI, Jun F  Survey: 50.7  Prior: 50.7
	Markit US Composite PMI, Jun F  Survey: —  Prior: 50.6
10:00 AM	Factory Orders, May  Survey: -0.60%  Prior: -0.80%
	Durable Goods Orders, May F  Survey: -1.30%  Prior: -1.30%
	Durables Ex Transportation, May F  Survey: —  Prior: 0.30%
	Cap Goods Ship Nondef Ex Air, May F  Survey: —  Prior: 0.70%
	Cap Goods Orders Nondef Ex Air, May F  Survey: —  Prior: 0.40%
	ISM Non-Manufacturing Index, Jun  Survey: 56.0  Prior: 56.9

Canadian Economic Data

08:30 AM

Int’l Merchandise Trade, May  Survey: -1.70b  Prior: -0.97b

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 slightly higher on avg volume in TY futures (312k), 10Y 2.02%, S&P futures -2, crude 58.95 (-0.14). UK gilts rallying after huge miss in June construction PMI (43.1 vs 49) – worse month in more than 10 years.  German bunds fell sharply following a BB story citing ECB sources saying there is no rush for July rate cut, the June bund fell 28 ticks on to bounce 42 ticks, with prices fading since.  Expectations were already for the ECB to skip the July meeting and cut in Sep.  GOCs lower, ~2bps wider vs tsys, 10Y 1.48% in catchup mode after holiday yest. GOC 2s10s curve now negative, -0.4bps , flattest since 2007.

News headlines

Stocks Mixed as Investors Mull Trade; Bonds Climb: Markets Wrap (Bloomberg) U.S. equity futures slipped and European stocks edged higher after a mixed session in Asia as enthusiasm over the latest trade truce between America and China waned. The dollar drifted while Treasuries rose.

TSX futures up on higher gold prices (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Tuesday, supported by rising gold prices.

Oil Steady as OPEC Pact Contends With Gloomy Economic Data (Bloomberg) Oil steadied as investors weighed OPEC’s extending output cuts into 2020 against troubling economic data from around the world.

Locked out of China, U.S. pork producers sniff out new buyers (Reuters) U.S. hog farmers lost hundreds of millions of dollars in export sales to China and Mexico after President Donald Trump launched his trade wars last year.

Australia cuts key rate for second straight month to spur growth (BNN) Australia executed its first back-to-back interest-rate cuts in seven years as policy makers attempt to provide support to a slowing economy and try to rekindle dormant inflation.

Relief rally fades as growth fears loom (Reuters) World stocks eked out meagre gains on Tuesday amid worries the global economy was faltering after data showed manufacturing activity slowed last month, weakening appetite for risk.

Trump says China trade talks ‘back on track,’ new tariffs on hold (Reuters) The United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing.

Market Overview: US 10yr note futures are up 0.086% at 127-26, S&P 500 futures are down -0.09% at 2965, Crude oil futures are down -0.25% at $58.94, Gold futures are up 0.41% at $1395, DXY is down -0.1% at 96.745, CAD/USD is down -0.12% at 0.7623.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.479%	2 Year	1.777%
5 Year	1.408%	5 Year	1.781%
10 Year	1.481%	10 Year	2.02%
30 Year	1.697%	30 Year	2.551%

US Economic Data

There is no US economic data for today.

Canadian Economic Data

09:30 AM	Markit Canada Manufacturing PMI, Jun  Survey: —  Prior: 49.1
10:00 AM	Bloomberg Nanos Confidence, Jun 28  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

Tsys trading mixed, curve slightly steeper, US 10Y 2.01% on light volume (265k TY1) as focus turns to G20 in Osaka this weekend and US/China trade negotiations. May Personal Income & spending as well as U. of Michigan sentiment scheduled for this morning. Core EGBs flat, Italian spreads ~3bps narrower as Italy PM will ask the EU to delay deficit procedure to Sept or Oct.  In Canada, GOCs also flat before Apr GDP and BOC Business Outlook Survey – we expect a mild decline from the -0.6% Q1 reading due mainly to lower capacity utilization (lowest since 2017) and ongoing trade concerns with the US. 

News headlines

U.S. Futures, European Stocks Rise as G-20 Starts: Markets Wrap (Bloomberg) American equity futures climbed alongside European stocks on Friday ahead of the highly anticipated U.S.-China presidential meeting that could determine the next chapter in the trade war. Asian shares edged lower, while bonds drifted.

TSX futures rise ahead of GDP data (Reuters) Canada’s main stock index futures edged higher on Friday, ahead of gross domestic product data, gaining support from higher gold prices.

Trump prepares for ‘productive’ talks with Xi on trade war (Reuters) U.S. President Donald Trump on Friday said he hoped for productive talks with Chinese President Xi Jinping on a trade war that is casting a shadow on global growth, but said he had not made any promises about a reprieve from escalating tariffs.

European shares move higher ahead of pivotal G20 meeting (Reuters) European stocks edged higher on Friday, as investors treaded cautiously ahead of a critical G20 meeting where the outcome of U.S-China trade talks will be closely monitored against the backdrop of a slowing global economy.

G20 meeting may offer more clarity for OPEC, non-OPEC: Russia’s Novak (Reuters) Russian Energy Minister Alexander Novak said on Friday he hoped a meeting of G20 nations in Japan would provide clarity for OPEC and non-OPEC oil producers as they consider whether to extend a deal on cutting crude supplies beyond June.

Oil Set for Best Month Since January Before Crucial Meetings (Bloomberg) The U.S.-Iran standoff and falling American stockpiles have propelled oil toward its biggest monthly gain since January but crucial meetings in the next few days will determine whether the rally continues.

Canada has ‘broad international’ support on China file: Freeland (BNN) Canada is fortunate to have assembled a « broad international coalition » of countries who support Canada and believe arbitrary detentions are harmful, Foreign Affairs Minister Chrystia Freeland said Friday at the G20 summit in Osaka.

Euro set for biggest monthly gain in 17 months before price data (Reuters) The euro stabilised on Friday but was on track for its biggest monthly gain in 17 months as traders questioned how much firepower the European Central Bank could potentially roll out to support a struggling economy and boost inflation.

Market Overview: US 10yr note futures are down -0.098% at 127-26, S&P 500 futures are up 0.18% at 2936.25, Crude oil futures are up 0.17% at $59.53, Gold futures are up 0.33% at $1416.6, DXY is down -0.05% at 96.15, CAD/USD is down -0.01% at 0.7637.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.46%	2 Year	1.747%
5 Year	1.389%	5 Year	1.775%
10 Year	1.48%	10 Year	2.017%
30 Year	1.716%	30 Year	2.535%

US Economic Data

08:30 AM	Personal Income, May  Survey: 0.30%  Prior: 0.50%
	Personal Spending, May  Survey: 0.50%  Prior: 0.30%
	Real Personal Spending, May  Survey: 0.40%  Prior: 0.00%
	PCE Deflator YoY, May  Survey: 1.50%  Prior: 1.50%
	PCE Core Deflator MoM, May  Survey: 0.20%  Prior: 0.20%
	PCE Core Deflator YoY, May  Survey: 1.50%  Prior: 1.60%
09:45 AM	MNI Chicago PMI, Jun  Survey: 53.5  Prior: 54.2
10:00 AM	U. of Mich. Sentiment, Jun F  Survey: 97.9  Prior: 97.9

Canadian Economic Data

08:30 AM	GDP MoM, Apr  Survey: 0.20%  Prior: 0.50%
	GDP YoY, Apr  Survey: 1.60%  Prior: 1.40%
	Industrial Product Price MoM, May  Survey: -0.10%  Prior: 0.80%
	Raw Materials Price Index MoM, May  Survey: -3.00%  Prior: 5.60%
10:30 AM	BoC Business Outlook Future Sales, 2Q  Survey: —  Prior: 6.0
	BoC Senior Loan Officer Survey, 2Q  Survey: —  Prior: -2.7

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