US tsys trading slightly lower post ADP (182k vs 180k exp), Trade data (-40.8b vs -48b in Aug) & Tsy Qtrly refunding stmt ($64bln in 3,10& 30Y next wk, raising $3.6bln new cash). US 10Y above 2.20% (2.215), with core Euro bonds lower on higher stocks with S&P close to record, Euro stocks at two month highs. Aussie 10Y yields another 6bps higher after Aussie retail sales, sharp gains in China stocks. GOCs slightly lower, curve ~1bp steeper. BOC auctions $3.2bln in reopened 5Y bonds at noon, the 0.75% March 2021 (total outstanding $6.5bln post auction). The Mar21/5Y roll 12.2/12.1 seems tight as the wider 5/10 curve has steepened ~7bps over the last month and 5s are basically flat on the curve vs 2s/10s since last auction. Provis ) 0.5bps wider, Qc 48s 108/107, Qc/Ont 45 6.3/5.8 (5.8 yest), Ont 46 102/101 . BC tighter again this morn, BC/Ont 25 rl -11/-11.5 from -10 @ issue on Monday.
- Europe higher as Wall Street eyes fresh record (FT) Global stocks are hitting fresh two-month highs as Wall Street eyes a new record, Europe opens on the front foot, and after Asia traders welcomed a sizzling debut for Japan’s biggest privatisation in decades.
- Draghi: ECB willing and able to act in December (CNBC) The European Central Bank’s policymakers will review the degree of monetary stimulus they have deployed when they meet in December and remain willing and able to act if needed, ECB President Mario Draghi said on Tuesday.
- America has built the equivalent of 10 Keystone pipelines since 2010 — and nobody said anything (FP) While TransCanada Corp. has been cooling its heels on its Keystone XL proposal for the past six years, the oil pipeline business has been booming in the United States. Crude oil pipeline mileage rose 9.1 per cent last year alone to reach 66,649 miles, according to data from the Washington, D.C.-based Association of Oil Pipe Lines (AOPL) set to be released soon.
- VW slumps as emissions scandal spreads to gasoline cars (G&M) Volkswagen AG said it found faulty emissions readings for the first time in gasoline-powered vehicles, widening a scandal that so far had centred on diesel engines. The shares fell the most in almost five weeks.
- High demand, limited supply pushes Vancouver house prices to new highs (G&M) Even by the city’s lofty standards, price surges in the red-hot Vancouver real estate market have crossed into jaw-dropping territory. The median price for single-family detached homes sold on Vancouver’s coveted west side reached $2.91-million last month. That’s up 15.9 per cent over the past year and represents a 42-per-cent jump from October, 2013.
- Overview: IG24 5Y 70.795/71.481 (-0.460), US 10yr note futures are up +0.01% at 127-04, S&P 500 futures are up +0.27% at 2108.75, Crude oil futures are up +0.10% at 47.95$, Gold futures are up +0.34% at $1117.9, DXY is up +0.42% at 97.570.
US Economic Data
- MBA mortgage applications came in this morning at -0.8% for the week ending October 30th, versus prior week -3.5% decrease.
- ADP employment change came in at 182K in October compared to 190K in September (Expected 180K).
- Trade balance tightened to -$40.81B in September compared to previous month (-$48.02B).
- Markit US Services PMI for October (Final) is forecast at 54.5, 0.1 point higher than preliminary report.
- ISM non-manufacturing is forecast at 56.5 in October lower than September 56.9.
Canadian Economic Data
- Int’l merchandise trade worsened to -$2.53B in August from a revised deficit of -$0.82B in July and worse than expected (-$1.20B).
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