Long-duration Treasuries are rallying to start the week after Secretary Bessent opened the door for potential TGA sourced liquidity for buybacks. Fixed-income watchers perceived last week\u2019s announcement of at least doubling purchases from $2 billion to $4 billion as too modest and unlikely to move the needle; however, this morning\u2019s news that the fiscal chief may use cash from the department\u2019s general account that is nearing $1 trillion, offered a heavy amount of alleviation for the rates complex. The yield curve is descending in bull-flattening motion in response, led by the longer tenors, precisely the 10\u201330-year maturities that Washington is concentrating on lowering. And the drop in borrowing costs is also being helped by energy prices slipping, although heightening cross-border commerce disagreements between the US and Canada resulting in President Trump imposing 50% tariffs on the neighboring nation are countering some of the disinflationary effect stemming from cooler oil. Stocks aren\u2019t benefiting from the looser financial conditions overall though, as plunging chipmakers retreat ahead of Nvidia\u2019s earnings print this Wednesday that is poised to provide Wall Street with clues on how much further this AI-fueled bull market can run. The Dow Jones Industrial is the sole major domestic benchmark advancing on the session, nonetheless, 6 of the 11 principal sectors are rising and led by staples, financials and communication services. Additionally, cryptocurrencies and commodities ex crude are jumping, as bitcoin soars to a fresh three-month high just short of 80k. Elsewhere, the greenback is appreciating modestly, premiums on volatility protection instruments are loftier as hedging demand increases in light of a series of impactful events on the calendar and prediction markets are catching bids.<\/p>\n\n\n\n
A Week of Speeches, Geopolitics, Earnings, Tariffs, Data<\/strong><\/p>\n\n\n\n This week is likely to be pivotal with Wall Street needing to digest a series of impactful speeches, geopolitical tensions, Nvidia earnings, tariff measures and data prior to entering September, which is traditionally the weakest month for returns. But because the market\u2019s most significant headwind in recent weeks has been rising rates, communications from Treasury Secretary Bessent and Fed Chair Warsh will be critical, as statements can either suppress or intensify the pressure on yields. The fiscal leader is scheduled to discuss fresh sanctions on Iran this afternoon and is poised to address his debt buyback plans during the presentation voluntarily or in the reporter Q&A session with the potential for an investor reaction consisting of lower borrowing costs and cheaper oil prices. Meanwhile, the monetary policy head is traveling to Jackson Hole, Wyoming, to deliver central banking comments. For investors, the focus will be on if the chief has turned increasingly dovish in the aftermath of July lifting slowdown anxiety following the second month of contracting jobs and declining retail sales in 2026. Other important factors will include Nvidia\u2019s quarterly results, complicated foreign relation dynamics with Tehran and Ottawa, and the economic calendar, which comprises the Federal Reserve\u2019s preferred inflation gauge, benchmark nonfarm payroll revisions, durable goods, residential valuations, new home closings, consumer sentiment and confidence figures and weekly labor updates from ADP-employment and the government\u2019s unemployment claims.<\/p>\n\n\n\n Corporate earnings in Canada during the April through June period were up 9.7% quarter over quarter (q\/q), a considerably stronger print than the 1.1% growth in the January through March timeframe, according to Statistics Canada. Higher energy prices as a result of the US-Iran war supported profits within the petroleum and coal product manufacturing industry, which posted a 121% earnings jump. The C$10.9 billion was the highest since the first quarter of 2022. In addition to higher prices helping earnings, production ascended following the opening of refineries that were closed for maintenance. The primary metal, fabricated metal products and machinery manufacturing industry also supported the headline result with profits up by C$260 million, 6.1%, in the second quarter. US import tariffs were a headwind for this category, but the value of shipments to other countries nearly doubled. Earnings in the financial services sector were also strong, growing 5%, with 9 of the 13 subcategories producing profit growth.<\/p>\n\n\n\n Sales of manufactured items in Canada sank 0.2% month over month in July, according to an advance estimate from Statistics Canada. If the number remains unchanged, it would be a slowdown from the 0.1% gain in June. Statistics Canada attributes the weakness to the chemical and fabricated metal product subsectors.<\/p>\n\n\n\n Regarding the broader gauge, July\u2019s prices were down 0.20% when compared to June. For the headline y\/y measurement, the following items and the extent of their changes contributed to the higher reading:<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Long-duration Treasuries are rallying to start the week after Secretary Bessent opened the door for potential TGA sourced liquidity for buybacks. <\/p>\n","protected":false},"author":903,"featured_media":187936,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[4,5,12711,8,9,26,3],"tags":[850,3306,861],"contributors-categories":[13760],"class_list":["post-254337","post","type-post","status-publish","format-standard","has-post-thumbnail","category-asia","category-europe-middle-east-africa","category-ibkr-economic-landscape","category-region","category-securities","category-text-articles","category-traders-insight","tag-interest-rates","tag-us-new-home-sales","tag-yield-curve","contributors-categories-ibkr-macroeconomics"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\nInternational Roundup<\/strong><\/h2>\n\n\n\n
Canada Corporate Profits Climb<\/strong><\/h3>\n\n\n\n
But July Manufacturing Sales Contracted<\/strong>
<\/h3>\n\n\n\nSingapore Inflation Falls Below Expectations<\/strong><\/h3>\n\n\n\n
Singapore\u2019s Consumer Price Index was up 2.2% year over year (y\/y) in July, a slightly cooler reading than the 2.3% result expected by a consensus of economists, according to the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI). Nevertheless, it accelerated from 1.9% y\/y in June. The hotter print was driven primarily by elevated expenses of electricity and gas, both of which had declined in June. The core CPI, which strips out gasoline and other items with volatile prices, was more benign, climbing from 1.6% y\/y in June to 2% last month.<\/p>\n\n\n\n\n