Market Update
US tsys weaker before Sep payrolls release,10Y 2.365% (+1.6bps). Sep employment expected to have risen 80k after a 156k increase in August, the latest data distorted by hurricanes. Equities weaker (S&P fut -1.0), oil weaker. Tsys under pressure in Europe weighed by weaker bunds on stronger factory orders. GOCs lower, wider vs tsys before Sep jobs figures. Expectations are for a slowing in empl growth to 12k from 22k in Sep, wage growth likely to garner just as much attention given Poloz reference to capacity in his latest comments last week. Provincial spreads steady this week, Ontario curve flatter as tens outperform.
News headlines
Storms May Have Cut U.S. Hiring in Half Before Jobs Bounce Back (Bloomberg) While the U.S. job market’s solid run in 2017 was probably curbed last month by forces most economists couldn’t predict, any weakness is likely to be short-lived. The effects of two major hurricanes that inflicted potentially $90 billion in economic losses are expected to show up in September employment figures due Friday.
Tropical Storm Nate Blamed for 22 Deaths; Threatens US Coast (Bloomberg) Newly formed Tropical Storm Nate was blamed Thursday for at least 22 deaths in Central America as it dumped rain across the region on a path that would carry it toward a potential landfall on the U.S. Gulf Coast as a hurricane over the weekend.
Deadly Storm Nate Shuts Oil Rigs on Track Toward Gulf Coast (Bloomberg) Tropical Storm Nate, which has already shut oil and gas platforms in the Gulf of Mexico, strengthened as it continued north on a path that’ll bring it ashore in the U.S. by week’s end.
May Faces Calls to Quit After Speech That Went Wrong (Bloomberg) U.K. Prime Minister Theresa May is losing the confidence of her colleagues and should consider stepping down, a former minister suggested, after a key speech aimed at revitalizing her leadership descended into chaos.
Fed’s Williams Sees Need for Rate Hikes While Harker Eyes December (Bloomberg) Federal Reserve Bank of San Francisco President John Williams said moderate growth and his outlook for higher inflation will allow the U.S. central bank to raise interest rates, while his counterpart in Philadelphia signaled he’s anticipating a hike in December.
As Trump turns his back on climate change, Canada’s clean-technology sector stands to gain (Toronto Star) Donald Trump makes no secret of the fact that he’s anything but an environmentalist. Where his regressive policies will lead is the subject of constant debate, but it stands to reason that they may cloud the future for Canada’s clean-technology sector.
Overnight markets
US 10yr note futures are down -0.087% at 125-02, S&P 500 futures are down -0.09% at 2547.75, Crude oil futures are down -1.46% at $50.05, Gold futures are down -0.19% at $1270.8, DXY is up 0.04% at 93.996, CAD/USD is up 0.06% at 0.7953.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.526% | 2 Year | 1.496% |
| 5 Year | 1.766% | 5 Year | 1.963% |
| 10 Year | 2.122% | 10 Year | 2.364% |
| 30 Year | 2.497% | 30 Year | 2.902% |
US Economic Data
| 8:30 AM | Change in Nonfarm Payrolls, Sep -33k est 80k (156k prior) |
| Change in Manufact. Payrolls, Sep -1k est 74k (165k prior) | |
| Unemployment Rate, Sep 4.2% est 4.4% (4.4% prior) | |
| Underemployment Rate, Sep 8.3% (8.6% prior) | |
| Labor Force Participation Rate, Sep 63.1% (62.9%) | |
| Average Hourly Earnings MoM, Sep 0.5% est 0.3% (0.1% prior) | |
| Average Hourly Earnings YoY, Sep 2.9% est 2.5% (2.5% prior) | |
| 10:00 AM | Wholesale Inventories MoM, Aug est 1.0% (1.0% prior) |
| Wholesale Trade Sales MoM, Aug est0.0% (-0.1% prior) | |
| 15:00 PM | Consumer Credit, Aug est 15.540b (18.499b prior) |
Canadian Economic Data
| 8:30 AM | Net Change in Employment, Sep 106 est 12.0k (22.2k prior) |
| Unemployment Rate, Sep 6.2% est 6.2% (6.2% prior) | |
| Full Time Employment Change, 112 Sep (-88.1 prior) | |
| Part Time Employment Chage, -102 Sep (110.4 prior) | |
| Participation Rate, Sep 65.6 (65.7 prior) | |
| 10:00 AM | Ivey Purchasing Managers Index SA, Sep est 56.0 (56.3 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