Market update
US tsys trading slightly lower in narrow o/n range on very little overnite news, US 10Y 2.19 (+2bps) & curve steeper out to ten yrs. Core Euro bonds German 10Y bund slightly lower along with UK gilts before Draghi comments at 1:00 EST. Late Monday the US Treasury raised their borrowing needs for this qtr to $344bln from $270bln prelim est. RBA kept rates at 2.0% with odds of a rate cut were ~50%, Aussie yields ~6bps higher. GOCs are lower, outperforming tsys by ~1bp out the curve. Provis opening with bid tone, expect supply after solid BC 25 yest (-10 thru Onts, now -10.5 bid)
News headlines
- RBA holds rates at record-low 2 percent but adds easing bias (CNBC) The Reserve Bank of Australia held its key cash rate at 2 percent, saying that the prospects for an improvement in economic conditions had “firmed a little over recent months.”
- Treasury raises quarterly borrowing estimate to $344 billion (Marketwatch) The U.S. government expects to borrow $344 billion in the October-December quarter, an estimate that is $74 billion higher than previously projected in August, the Treasury Department said Monday.
- TransCanada seeks pause on pipeline decision (G&M) In what may be a last-ditch effort to salvage the Keystone XL pipeline from President Barack Obama’s anticipated rejection, TransCanada Corp. made an unprecedented request Monday – asking the U.S. government to suspend consideration of its bid to build an $8-billion (U.S.) pipeline to funnel Alberta oil sands crude across the United States to Gulf Coast refineries.
- Molson Coors and SABMiller in talks on joint venture stake sale (FT) Molson Coors, the US-Canadian brewer, is in advanced talks to buy SABMiller’s majority stake in their American joint venture, people familiar with the talks said, in a move seen as critical to helping Anheuser-Busch InBev secure its £68bn takeover of SAB.
Overnight markets
- Overview: IG24 5Y 72.516/73.216 (+0.262), US 10yr note futures are down -0.11% at 127-07+, S&P 500 futures are down -0.20% at 2091.25, Crude oil futures are up +1.26% at 46.72$, Gold futures are down -0.76% at $1127.3, DXY is up +0.40% at 97.316.
US Economic Data
- ISM New York (October) will be release at 9:45 (last report: 44.5).
- Factory orders are expected at -0.9% MoM in September fallowing -1.7% in August.
- IBD/TIPP economic optimism is forecast at 47.4 in November 0.1 point higher than October (47.3).
- Total vehicle sales are expected at 17.70M in October lower than September 18.07M.
Canadian Economic Data
- There is no major economic data 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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230