Market Update
Tsys trading lower, the 10Y back above 1.80%, (1.82 +4bps) heavy volume in TY futures (512k) , risk on with S&P futures (+6.5) looking to extend record highs on reports Trump will drop existing tariffs on $112bln in Chinese imports, the Chinese currency rising to the highest since August. Crude higher for a 3rd day (57.05 +1%) on trade optimism while OPEC said the outlook for the oil market has brightened going into next year – API inventory data later today. GOCs lower and steeper, 2s10s widest since August 1st, ~8bps since the BOC decision. We like maintaining steepeners given the cautious BOC and US tsy supply set to pick up this week (3s,10s & 30s).
News headlines
U.S. Futures Gain With Stocks; Treasuries Retreat: Markets Wrap (Bloomberg) U.S. equity futures climbed with European and Asian stocks as investors took confidence from signs that America and China are inching toward a trade deal. Treasuries fell, while the yuan strengthened past 7 for the first time since August.
TSX futures up as trade optimism lifts oil (Reuters) Canada’s main stock index futures rose slightly on Tuesday, as crude prices gained on hopes of a trade deal between the United States and China.
Oil Gains for a Third Day as Trade Deal Optimism Extends (Bloomberg) Oil rose for a third day, buoyed by signs of progress in the prolonged U.S.-China trade dispute, despite expectations for expanding American crude stockpiles.
Fed’s Barkin: Conflicting signals make U.S. economy hard to read (Reuters) Conflicting signals make it difficult to get a handle on the true health of the U.S. economy and reducing uncertainty for businesses would provide a shot in the arm to growth, Richmond Fed Reserve Bank President Thomas Barkin said on Tuesday.
Scramble for propane marks Mother Nature’s latest challenge for U.S. farmers (Reuters) Months after historic floods ravaged the U.S. Midwest, farmers scrambling to harvest their crops face a new headache: finding fuel to dry their soaked grains.
China presses Trump for more tariff roll-backs in ‘phase one’ trade deal (Reuters) China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a “phase one” U.S.-China trade deal, people familiar with the negotiations said on Monday.
OPEC sees its oil market share shrinking, lowers demand view (Reuters) OPEC will supply a diminishing amount of oil in the next five years as output of U.S. shale and other rival sources expands, the exporter group said, despite a growing appetite for energy fed by global economic expansion.
Market Overview: US 10yr note futures are down -0.181% at 129-11, S&P 500 futures are up 0.2% at 3081.75, Crude oil futures are up 0.96% at $57.08, Gold futures are down -0.59% at $1502.2, DXY is up 0.15% at 97.651, CAD/USD is down -0.16% at 0.7616.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.622% | 2 Year | 1.61% |
| 5 Year | 1.576% | 5 Year | 1.625% |
| 10 Year | 1.572% | 10 Year | 1.818% |
| 30 Year | 1.732% | 30 Year | 2.307% |
US Economic Data
| 08:30 AM | Trade Balance, Sep Survey: -$52.4b Actual:-$52.5b Prior: -$54.9b |
| 09:45 AM | Markit US Services PMI, Oct F Survey: 51.0 Prior: 51.0 |
| Markit US Composite PMI, Oct F Survey: — Prior: 51.2 | |
| 10:00 AM | ISM Non-Manufacturing Index, Oct Survey: 53.5 Prior: 52.6 |
Canadian Economic Data
| 08:30 AM | Int’l Merchandise Trade, Sep Survey: -0.65b Actual: -0.98b Prior: -0.96b |
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