Market Update

US tsys slightly lower, curve flatter, US 10Y 2.325%, on below avg volume in TY futures (172k). Mkt awaits Fed Governor Powell speech at 9:10 and Friday payrolls data.  Euro stocks slightly higher, crude below $50 on record high US exports last week. Core Euro bonds higher, 10Y bund/tsy spd hovering near three month low – ECB minutes from Sep 7 meeting offered little new insight. UK gilts higher, yields 2-3bps lower after PM May’s speech yest failed to inspire much confidence in her Brexit strategy amid reports 30 mps were plotting to remove her from office. In Canada, GOCs also biding time before Sep employment data tomorrow, 10Y 2.11%.  Provincial spreads opening 0.5bps tighter this morning – talk of Ont/QC 10Y.

News headlines 

Puerto Rico’s Benchmark Bond Falls to a Record Low (Bloomberg) Puerto Rico’s general-obligation bonds due in 2035 found a new low on Wednesday, falling to 32 cents on the dollar. The benchmark bond, one of its most actively traded securities over the past week, has been on the decline since Hurricane Maria slammed into the island last month and raised creditor concerns over debt recovery rates. President Donald Trump, who visited the territory on Tuesday, suggested the island’s debt will be wiped out to help it recover from the devastation.

Spain’s de Guindos Says Catalonia’s Independence Push Is Doomed (Bloomberg) Spanish Economy Minister Luis de Guindos ruled out any sort of mediated talks with separatist leaders and said Catalan banks have signaled they may move out of the region if the push for independence continues.

Saudi King, Putin to Talk Oil Pact on ‘Epochal’ Russia Visit (Bloomberg) President Vladimir Putin began talks with Saudi King Salman bin Abdulaziz, who’s making a historic first visit to Russia by a monarch of the Gulf kingdom as the two energy superpowers seek an understanding on whether to extend an agreement curbing oil supplies.

TransCanada Announces Termination of Energy East Pipeline and Eastern Mainline Projects (Market Wired) “After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East and Eastern Mainline applications. TransCanada will also notify Quebec’s Ministère du Developpement durable, de l’Environnement, et Lutte contre les changements climatiques that it is withdrawing the Energy East project from the environmental review process.”

Montreal home prices rise as inventory falls 12% in September (BNN) The balance of power in Montreal’s housing market has tilted further in owners’ favour as listings dipped in September. The inventory of active listings of properties available for sale across the Montreal metropolitan area fell 12 per cent year-over-year in September, according to the city’s real estate board. Total property sales rose six per cent, led by growth in the condo and so-called “plex” market.

Shopify shares slide after company called ‘get-rich-quick scheme’ (The Star) Shopify Inc. tumbled as much as 10 per cent after Citron Research began shorting the stock, saying the Canadian e-commerce company’s claims that it’s minting millionaires should be investigated, and questioning its ability to scale up.

Overnight markets 

Overview: US 10yr note futures are down 0% at 125-11, S&P 500 futures are up 0.13% at 2539.5, Crude oil futures are up 0.16% at $50.06, Gold futures are up 0.31% at $1280.7, DXY is up 0.16% at 93.607, CAD/USD is up 0.15% at 0.8003.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.531% 2 Year 1.475%
5 Year 1.766% 5 Year 1.923%
10 Year 2.113% 10 Year 2.328%
30 Year 2.487% 30 Year 2.87%

US Economic Data

8:30 AM Initial Jobless Claims, Sep 30 260k est 265k (272k prior)
Continuing Claims, Sep 23 1938k est 1950k (1934k prior)
Trade Balance, Aug -42.4b est -42.7b (-43.7b prior)
9:45 AM Bloomberg Consumer Comfort, Oct 1 (51.6 prior)
10:00 AM Factory Orders, Aug est 1.0% (-3.3% prior)
Factory Orders Ex Trans, Aug (0.5% prior)
Durable Goods Order, Aug est 1.7% (1.7% prior)
Durable Ex Transportation, Aug (0.2% prior)
Cap Goods Orders Nondef Ex Air, Auf (0.9% prior)
Cap Goods Ship Nondef Ex Air, Aug (0.7% prior)

Canadian Economic Data

8:30 AM Int’l Merchandise Trade, Aug -3.41 est -2.6b (-3.04b prior)



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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230