Comments
26/06/2019
Market Update
US tsys lower, near overnight lows, risk on after comments from US tsy sec Mnuchin on possible trade deal with China, in advance of Trump/Xi meeting on Saturday at G20. S&P futures +12.5, crude +2% 58.94 highest since May 30th. Tsy curve 1bp flatter, 10Y 2.02% (+3.4bps), on heavy volume (465k) in TY futures. Core Euro bonds also lower, lagging the move in tsys by ~2bps. GOCs lower, in line with tsys. Two year auction at noon – reopening of August 21s with the Aug21/2Y roll -2.1/-2.4.
News headlines
U.S. Futures Advance on Trade Hopes; Bonds Retreat: Markets Wrap (Bloomberg) U.S. index futures gained while stocks in Europe fluctuated as comments by Treasury Secretary Steven Mnuchin tempered concern over the trade impasse with China. Government bonds retreated.
TSX futures up on higher oil prices (Reuters) Canada’s main stock index futures rose on Wednesday as oil prices jumped after data showed a decline in U.S. crude inventories and an outage at a major refinery on the U.S. East Coast.
China asks Canada to suspend all meat exports amid tensions (BNN) The Chinese Embassy said Tuesday it has asked Canada to suspend all meat exports, a surprise move that comes amid the diplomatic dispute over the December arrest of Huawei executive Meng Wanzhou in Vancouver.
U.S. aims to restart China trade talks, will not accept conditions on tariff use (Reuters) The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday, but Washington will not accept any conditions around the U.S. use of tariffs in the dispute, a senior administration official said on Tuesday.
Trump-Xi meet, Iran tension to overshadow G20 summit in Japan (Reuters) Concerns over trade, conflict and oil will dominate a summit of the Group of 20 major economies in Japan this weekend, with attention focused on a meeting between the leaders of the United States and China, embroiled in a lengthy trade war.
Oil Jumps to Four-Week High on Report of Falling U.S. Stockpiles (Bloomberg) Oil rose to a four-week high after an industry report signaled a bigger-than-forecast drop in U.S. crude stockpiles, adding impetus to a rally that’s been driven by a tense standoff between Washington and Tehran.
BoE makes case for flexible regulation after Brexit (Reuters) Britain needs independent financial regulators after Brexit that can respond swiftly to changes in the economy and continue to nurture innovation, a senior Bank of England official said on Wednesday.
Market Overview: US 10yr note futures are down -0.22% at 127-27, S&P 500 futures are up 0.41% at 2934, Crude oil futures are up 1.83% at $58.89, Gold futures are down -0.7% at $1408.7, DXY is up 0.16% at 96.293, CAD/USD is down -0.09% at 0.76.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.432% | 2 Year | 1.745% |
| 5 Year | 1.367% | 5 Year | 1.764% |
| 10 Year | 1.474% | 10 Year | 2.018% |
| 30 Year | 1.713% | 30 Year | 2.542% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, Jun 21 Survey: — Actual: 1.30% Prior: -3.40% |
| 08:30 AM | Durable Goods Orders, May P Survey: -0.30% Prior: -2.10% |
| Durables Ex Transportation, May P Survey: 0.10% Prior: 0.00% | |
| Cap Goods Orders Nondef Ex Air, May P Survey: 0.10% Prior: -1.00% | |
| Cap Goods Ship Nondef Ex Air, May P Survey: 0.10% Prior: 0.00% | |
| Wholesale Inventories MoM, May P Survey: 0.50% Prior: 0.80% |
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
25/06/2019
A bit of risk-off overnight has given a bit of a lift to Tsys, but overall, markets look flat Tuesday ahead of a full slate of Fed speakers. U.S. sanctions placed Monday on Iran’s Ayatollah Khamenei and Tehran’s declaration that the ‘diplomatic path is shut’ subdued risk appetite. But Tsys ultimately came off intraday highs as European trading picked up, Sep 10-Yr futures (TY) last up 2.5/32 at 128-0.5 (L: 127-28.5 / H: 128-06). The 2-Yr yield is down 0.5bps at 1.7277%, 5-Yr is down 0.7bps at 1.7408%, 10-Yr is down 0.7bps at 2.0073%, and 30-Yr is down 1.1bps at 2.5335%. Equity futures are a little lower (S&P off 0.1%), DXY up 0.1%. Fedspeak in spades today: Williams at 8h45, Bostic at noon, Powell at 13h00, Barkin at 15h30, and Bullard at 18h30. Data includes Conf. Board cons. confidence and new home sales 10h00.
News headlines
Stocks Slip on Geopolitical Tensions; Gold Climbs: Markets Wrap (Bloomberg) U.S. equity futures edged lower alongside European and Asian stocks on Tuesday as geopolitical tensions simmered in the build up to this week’s G-20 meeting. Gold and the yen rose as investors sought safer assets.
Futures lower on Iran tensions, trade worries (Reuters) U.S. stock futures were pulled lower by Iran tensions and trade worries on Tuesday, with investors focusing on Federal Reserve officials for more clarity on interest rates.
TSX futures down as oil prices dip (Reuters) Futures pointed to a lower opening for Canada’s main stock index on Tuesday, hit by falling oil prices.
Oil Steadies as Iran Tensions Mingle With Economic Concerns (Bloomberg) Oil steadied after rallying almost 8% in three days as investors weighed the risks of a supply disruption in the Middle East against concerns over the global economy and demand.
Trump agriculture secretary: U.S. farmers ‘casualties’ of trade war – CNN (Reuters) U.S. Agriculture Secretary Sonny Perdue acknowledged that American farmers are being hurt by President Donald Trump’s trade war with China, according to an interview broadcast on Tuesday.
China May rare earth magnet exports to U.S. jump amid threat of restrictions (Reuters) China’s exports of rare earth magnets to the United States rose more than 20% in May from the previous month to their highest since at least 2016, data released by the General Administration of Customs showed on Tuesday, as Beijing considers restricting shipments as part of a long-running trade row.
Euro zone bank profitability may weaken on slowdown: ECB (Reuters) Profitability across the euro zone bank sector is low and weakening growth could further dampen the sector’s prospects, European Central Bank Vice President Luis de Guindos said on Tuesday.
Market Overview: US 10yr note futures are up 0.024% at 127-31, S&P 500 futures are down -0.1% at 2949, Crude oil futures are down -0.35% at $57.7, Gold futures are up 0.79% at $1429.4, DXY is up 0.08% at 96.055, CAD/USD is down 0% at 0.7587.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.407% | 2 Year | 1.74% |
| 5 Year | 1.35% | 5 Year | 1.746% |
| 10 Year | 1.463% | 10 Year | 2.009% |
| 30 Year | 1.712% | 30 Year | 2.537% |
US Economic Data
| 09:00 AM | FHFA House Price Index MoM, Apr Survey: 0.20% Prior: 0.10% |
| S&P CoreLogic CS 20-City YoY NSA, Apr Survey: 2.50% Prior: 2.68% | |
| S&P CoreLogic CS 20-City NSA Index, Apr Survey: 215.61 Prior: 214.09 | |
| 10:00 AM | Richmond Fed Manufact. Index, Jun Survey: 2 Prior: 5 |
| New Home Sales, May Survey: 684k Prior: 673k | |
| New Home Sales MoM, May Survey: 1.60% Prior: -6.90% | |
| Conf. Board Consumer Confidence, Jun Survey: 131.0 Prior: 134.1 |
Canadian Economic Data
| 08:30 AM | Wholesale Trade Sales MoM, Apr Survey: 0.20% Prior: 1.40% |
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
21/06/2019
Market Update
US tsys slightly higher, 10Y off the lows back above 2.0% (Thurs 1.97% 2.5 yr low), decent volume in TY futures (455k), tsys revered course after Trump called for air strikes. Fed Claria this morning on BB basically echoed Powell- Fed will act if appropriate. Core Euro bonds lower on stronger PMI data. French PMI came in better than exp (52 vs 50.8), 10Y bund ~3bps higher -0.30% , Eurozone PMI fell to the lowest in five and a half years in June. In Canada, GOCs are lower before April Retail Sales , a 0.2% reading expected after March’s huge 1.1% (1.7% ex-auto) gain.
News headlines
TSX futures drop on U.S.-Iran tensions (Reuters) Futures pointed to a lower opening for Canada’s main stock index on Friday, tracking declines in global equities as rising tensions between the United States and Iran kept investors on edge.
Dashboard of a downturn: global recession signals (Reuters) As the U.S.-China trade war erodes confidence and central banks prepare to unleash another wave of stimulus, investors are checking which advance warning indicators might be forecasting a global economic recession.
Clarida: Outlook is for continued U.S. expansion, but Fed prepared to act (Reuters) Federal Reserve Vice Chairman Richard Clarida said the Fed expects the U.S. economic expansion to continue but is prepared to reduce interest rates if trade and other uncertainties put that outlook at risk.
Brent oil up 6% in one week on fears of U.S. attack on Iran (Reuters) Brent oil rallied above $65 per barrel and was set to notch up a 6% gain this week on fears of a U.S. military attack on Iran that would disrupt flows from the Middle East, which provides more than a fifth of the world’s oil output.
Chevron Phillips Chemical in bid to acquire Nova Chemicals (Reuters) Chevron Phillips Chemical Company, a joint venture between Chevron Corp and Phillips 66, has offered to acquire Nova Chemicals Corp for more than $15 billion including debt, people familiar with the matter said on Thursday.
European central bankers claim oversight over Facebook’s cryptocurrency (Reuters) Three European central bankers are claiming oversight over Facebook’s planned virtual currency to ensure it will not jeopardize the financial system or be used to launder money.
Slack’s direct listing reference price is set at US$26 by NYSE for Thursday debut (FP) The New York Stock Exchange set a reference price of US$26 per share for trading in workplace messaging application Slack Technologies Inc.
The number is in line with the volume weighted average price at which the stock has been changing hands in the private markets. Slack said in a filing last month that number was US$26.82 for May, a slight increase from US$25.91 in April.
Market Overview: US 10yr note futures are down -0.22% at 127-25, S&P 500 futures are down -0.24% at 2952.75, Crude oil futures are up 0.51% at $57.36, Gold futures are up 0.27% at $1400.7, DXY is down -0.08% at 96.555, CAD/USD is up 0.01% at 0.7579.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.436% | 2 Year | 1.766% |
| 5 Year | 1.364% | 5 Year | 1.776% |
| 10 Year | 1.477% | 10 Year | 2.025% |
| 30 Year | 1.712% | 30 Year | 2.537% |
US Economic Data
| 09:45 AM | Markit US Manufacturing PMI, Jun P Survey: 50.5 Prior: 50.5 |
| Markit US Services PMI, Jun P Survey: 51.0 Prior: 50.9 | |
| Markit US Composite PMI, Jun P Survey: — Prior: 50.9 | |
| 10:00 AM | Existing Home Sales, May Survey: 5.30m Prior: 5.19m |
| Existing Home Sales MoM, May Survey: 2.10% Prior: -0.40% |
Canadian Economic Data
| 08:30 AM | Retail Sales MoM, Apr Survey: 0.20% Prior: 1.10% |
| Retail Sales Ex Auto MoM, Apr Survey: 0.40% Prior: 1.70% |
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