Market Update
US tsys slightly lower, 10Y 1.53%, giving up earlier gains as equity futures pare losses (S&P -8). ‘Risk off’ tone ahead of resumption of trade talks between the US & China, Chinese officials narrowing the scope of what issues they will negotiate according to BN. Core Euro bonds mixed , 10Y tsy/bund spread 1bp wider @ 212 despite weak German factory orders (-0.6% vs -0.3% exp). Last week’s massive US outperformance (10Y tsy -15bps vs -1bp for bunds) brought the 10Y spread to the narrowest in 18 months. GOCs lower, 0.5-1bp wider vs tsys, data calendar picks up with Sep Housing Starts tomorrow and employment on Friday. The BOC auctions $4.2bln in new 5Y bonds Wednesday – March 1 2025s with the WI/5Y roll -0.1bps vs -2.9bps for the 5Y roll (Sep/Mar 24). Federal leaders debate tonite as well. Last week’s 10Y $1bln Enbridge issue definitely added to pressure on secondary spreads, bonds ended 170/168 vs 163.7 NI.
News headlines
U.S. Stock Futures Decline as Trade Roils Outlook: Markets Wrap (Bloomberg) Futures on U.S. equity indexes ticked lower while the yuan slipped on Monday on concern China may be increasingly reluctant to agree a broad trade deal with the Trump administration. European stocks gained and Treasuries fluctuated.
TSX futures edge lower on U.S.-China trade talk concerns (Reuters) Futures for Canada’s main stock index inched lower on Monday, pressured by worries over the outcome of the upcoming U.S.-China trade talks.
China narrows scope for trade deal with U.S. ahead of talks (BNN) Chinese officials are signaling they’re increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump, ahead of negotiations this week that have raised hopes of a potential truce.
Where the U.S.-Japan trade deal falls short of Trans-Pacific pact abandoned by Trump (Reuters) U.S. President Donald Trump has called his new trade deal with Japan a “phenomenal” victory for U.S. farmers.
Oil Edges Higher as Market Eyes Trade Talks Later This Week (Bloomberg) Oil pared its biggest weekly drop since July ahead of the resumption of U.S.-China trade talks later this week that may sway a cloudy demand outlook.
U.S. economists wrestle with how to help ‘left behind’ areas (Reuters) Boston Federal Reserve officials have a pretty good idea what helped the ailing industrial town of Lawrence, Massachusetts, start to make a turnaround, including a state takeover of the public school system and a focused effort to lift job options for working parents.
Low inflation? Nothing to worry about, Fed’s George says (Reuters) Kansas City Federal Reserve Bank President Esther George on Sunday rejected the notion that the U.S. central bank should cut interest rates to try to boost low inflation, which she said is largely a result of global forces that U.S. monetary policy can do little to counter.
German recession looms as industrial orders drop more than expected (Reuters) German industrial orders fell more than expected in August on weaker domestic demand, data showed on Monday, adding to signs that a manufacturing slump is pushing Europe’s largest economy into recession.
Market Overview: US 10yr note futures are down -0.107% at 131-25, S&P 500 futures are down -0.26% at 2943.25, Crude oil futures are up 1.23% at $53.46, Gold futures are down -0.51% at $1505.2, DXY is up 0.05% at 98.86, CAD/USD is down 0% at 0.7512.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.418% | 2 Year | 1.41% |
| 5 Year | 1.26% | 5 Year | 1.345% |
| 10 Year | 1.248% | 10 Year | 1.531% |
| 30 Year | 1.437% | 30 Year | 2.03% |
US Economic Data
| 03:00 PM | Consumer Credit, Aug Survey: $15.000b Prior: $23.294b |
| 10/07 – 10/11 | Monthly Budget Statement, Sep Survey: $93.0b Prior: $119.1b |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Oct 4 Survey: — Prior: 57.8 |
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