US tsys slightly higher in NY open, 10Y 2.045 (-1.1bps) with short end unch. Euro stocks higher a second day, USD The US auctions $24bln in 3Y notes at 1:00Pm with the WI 0.895%. Last month’s 3Y cleared @ 1.056% so yields are ~16bps lower close to the 6 mnth lows. Core Euro bonds underperforming, 10Y bunds 3bps higher @ 0.60% despite weaker factory orders, strong UK 2034 gilt auction (b/c 2.02 vs 1.50 prev). GOCs opening unch, with small buying of CMBs, provis overnite thou spds are opening unch on no trade, bids 0.5bps wider.
- German Factory Orders Unexpectedly Fall Amid Economic Risks (Bloomberg) German factory orders unexpectedly fell in August in a sign that Europe’s largest economy is vulnerable to weaker growth in China and other emerging markets.
- Treasuries Rise as Goldman Says Fed May Hold Rate Well Into 2016 (Bloomberg) Goldman Sachs Group Inc. says there’s a chance the Federal Reserve will delay its planned interest-rate increase well into 2016, or even later.
- Bank of England Won’t Raise Rates Until 2017, Markets Show (Bloomberg) It’s getting increasingly difficult to convince investors that the Bank of England will tighten monetary policy any time next year. With volatility-plagued stock markets and a slowdown in China threatening to derail the global economy, traders have been relentlessly setting back their predictions for when the Federal Reserve and BOE will raise interest rates from record lows.
- Treasury auction sees US join 0% club (FT) For the first time ever, investors on Monday parked cash for three months at the US Treasury in return for a yield of zero per cent.
- Renminbi overtakes Japanese yen as global payments currency (FT) China’s renminbi has surpassed the Japanese yen to become the world’s fourth-most-used payments currency, despite an unexpected devaluation and concerns about slowing Chinese growth.
- Aussie Gains Fifth Day as Rate-Cut Wagers Fall After RBA Meeting (Bloomberg) The Australian dollar strengthened for a fifth day versus its U.S. peer as traders pared bets that interest rates would be lowered this year by the central bank after it kept them unchanged at a record low of 2 percent on Tuesday.
- Overview: IG24 5Y 82.771/83.362 (+0.316), US 10yr note futures are down -0.07% at 128-23+, S&P 500 futures are flat at 1974.75, Crude oil futures are up +0.80% at 46.63, Gold futures are up +0.54% at $1143.70, DXY is down -0.24% at 95.876.
US Economic Data
- Trade balance tightened to -$41.86B in August compared to previous month (-$41.86B).
- IBD/TIPP economic optimism is forecast at 44.5 in October 2.5 points higher than September (42.0).
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).
- IVEY purchasing managers index is forecast at 54.0 in September versus August 58.0.
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