Market Update

US tsys trading higher maintaining gains from overnight ‘risk off’ session, yields 1-4bps lower led by the short end , 10Y 1.63% and the tsy curve 3 bps steeper.  Prices off the highs after Sep ADP 135k vs 140k exp with Aug revised lower 157k vs 195k. S&P futures -13pts, just off the lows, crude slightly higher after 11 straight days of declines.  FTSE -2% worst decline in two months after Boris Johnson threatened a no-deal Brexit unless a deal is done on his terms.  GOCs  mixed,curve steeper & wider vs tsys, 10Y 1.36%. BOC auctions $3.3bln of reopened 1.25% June 2030s with the J30/10Y roll 2.2/2.0

News headlines

U.S. Futures Fall With Europe Stocks; Dollar Rises: Markets Wrap (Bloomberg) U.S. stock-index futures retreated with Asian shares while equities sank across Europe as miserable manufacturing data from the world’s largest economy kept reverberating around markets. The dollar advanced.

TSX futures slip on global growth fears (Reuters) Futures for Canada’s main equity index fell on Wednesday after a weak U.S. manufacturing report added to global growth worries.

Oil Steady After Six-Day Slide Amid Tighter Supply, Demand Fears (Bloomberg) Oil steadied after sliding for six days in a row as signs of tighter supply in the U.S. and OPEC jostled with ongoing concern that a fragile global economy is eroding fuel demand.

German Growth Outlook Dims on Waning Export Demand, Trade Spats (Bloomberg) Germany’s five leading research institutes slashed their forecasts for economic growth, as manufacturers in Europe’s biggest economy struggle with waning global demand and lingering trade disputes.

WTO to back U.S. tariffs over Airbus subsidies (Reuters) The World Trade Organization is poised on Wednesday to open the door to hefty U.S. tariffs on European goods over illegal subsidies for Airbus, pushing a 15-year-old row over support for plane giants to the center of fraught global trade relations.

Italy says very worried by prospect of U.S. tariffs on its exports (Reuters) Foreign Minister Luigi Di Maio said on Wednesday that Rome was worried by the prospect of U.S. tariffs on Italian exports.

U.S. Fed charts its own course on climate change, too (Reuters) Dallas Federal Reserve President Robert Kaplan faced more questions on one particular topic than any other at a recent lunch with local business owners and community leaders on Texas’s Gulf Coast.

Hong Kong August retail sales worst on record as protests escalate (Reuters) Hong Kong’s August retail sales were the worst on record, the government said on Wednesday, as escalating anti-government protests that have gripped the Chinese-ruled city for nearly four months scared off tourists and battered spending.

Market Overview: US 10yr note futures are up 0.108% at 130-26, S&P 500 futures are down -0.43% at 2925.25, Crude oil futures are up 0.82% at $54.06, Gold futures are up 0.22% at $1492.3, DXY is up 0.08% at 99.205, CAD/USD is up 0.17% at 0.7549.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.512% 2 Year 1.516%
5 Year 1.365% 5 Year 1.472%
10 Year 1.352% 10 Year 1.625%
30 Year 1.515% 30 Year 2.089%

US Economic Data

07:00 AM MBA Mortgage Applications, Sep 27  Survey: —  Actual: 8.10% Prior: -10.10%
08:15 AM ADP Employment Change, Sep  Survey: 140k Actual: 135k Prior: 195k Revised 157k

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