cti2015header-morning comments web

Market Update

-Tsys trading lower after 8:30 claims data, ‘risk on’ as Euro stocks rise, crude at new highs WTI above $50 for first time since June 24th , US 10Y 1.72 (+1.5bps). Euro stocks higher led by fincls – DB up another 2.0% despite news the Bank mismarked loans. Core Euro bonds lower after rising initially after ECB Sep 8 minutes showed the CB was ready to add to QE beyond March 2017 if needed. GOCs lower led by the 10Y sector, 10Y rolls wider, the M22/5Y roll also continuing to widen post auction yest, now 5.5bps. Decent bid for longs, 10s30s ~1bp flatter @ 65.8bps. Provis wider after closing 0.5bps wider yest, this morn Ont48s traded down at 95.5, Ont 26s 84.5/84, Alberta longs tradign up this morn on strength in crude.

News headlines

Fed Rate Bets Boost Dollar, Damp Treasuries; Europe Stocks Fall (Bloomberg) The Federal Reserve is back in the financial-market spotlight, with strengthening speculation that an interest rate hike is imminent buoying the dollar and spurring the yield on two-year Treasuries to the most in 10 years versus German notes.

Oil steady near 2016 highs after U.S. inventory drop (Reuters) Oil prices were steady on Thursday, underpinned by a surprisingly large drop in U.S. inventory levels the previous day to stay within sight of this year’s highs hit in June. Brent crude futures were unchanged at $51.86 per barrel at 0913 GMT, after hitting a high of $52.09 the previous day. U.S. futures were down 5 cents at $49.78 a barrel

Strong German data allay growth concerns, Merkel promises tax cuts (Reuters) Strong demand from euro zone countries and domestic customers drove a bigger-than-expected rise in German industrial orders in August, suggesting factories will contribute to growth in Europe’s economic powerhouse in coming months.

UK’s economic productivity finally returns to pre-crisis peak: ONS (Reuters) Britain’s economic productivity – the key driver of living standards – has finally clawed back the ground it lost during and after the financial crisis, but remains almost a fifth below where it might have been had the crisis never happened.

Deutsche Bank’s $14 Billion Scare (Bloomberg) This summer, U.S. Justice Department officials working on a mortgage securities investigation of Deutsche Bank AG expected the bank to settle the matter for $2 billion to $3 billion, according to people with knowledge of the matter.

Monte Paschi Said to Plan Debt-Swap Deadline Before Italian Poll (Bloomberg) Banca Monte dei Paschi di Siena SpA intends to rush through provisional bondholder agreements in a debt-for-equity swap before Italy’s Dec. 4 referendum, according to people with knowledge of the matter.

End of Canada’s ‘unique’ mortgage system means higher bank costs (Financial Post) The days when Canada’s banks could offload much of the risk of underwriting mortgages onto taxpayers may be drawing to a close. Canadian Finance Minister Bill Morneau disclosed plans Monday to begin consultations on sharing the risk of mortgage default with the country’s lenders. The move was part of a package of measures designed to stabilize the housing market after years of soaring prices in Vancouver and Toronto.                                                                          

Overnight markets

-Overview: US 10yr note futures are down -0.084% at 130-4, S&P 500 futures are down -0.16% at 2149.75, Crude oil futures are up 0.68% at $50.17, Gold futures are down -0.52% at $1262, DXY is up 0.36% at 96.469.

US Economic Data 

-8:30 AM: Initial Jobless Claims, Oct 1st,  249k, est. 256k (prior 0.8%)

-Continuing Claims, Sep 24th, 2058k, est. 2081k (prior 2062k, revised 2064k)

-9:45 AM: Bloomberg Consumer Comfort Index, Oct 2nd, (prior 41.6)


Canadian Economic Data

-8:30 AM: Building Permits, m/m, Aug, 10.4%, est. 1.0% (prior 0.8%, revised 3.4%)


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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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