Market Update
US tsys higher, TY futures near the highs of the session on heavy volume (450k) with the 10Y 1.525%(-3bps). Risk off as the US considers limits of pension fund investments in Chinese equities, while NBA support for pro-democracy protests in Hong Kong has drawn ire from the Chinese govt. US equities under pressure thru the o/n session, S&P futures -0.70%, while crude erased early gains, now -1.4%. Core Euro bonds higher led by 10Y gilts, 10Y German/UK spd below 100 bps for the first time since late March, as talks with the EU are at a ‘critical point’ according to Uk govt sources (Guardian). GOCs higher, in line with tsys, 10Y 1.26%. Sep Housing Starts slightly stronger than exp (221k vs 220k)
News headlines
U.S. Futures, Stocks Slide as Trade Tensions Flare: Markets Wrap (Bloomberg) U.S. equity-index futures extended a retreat alongside European stocks on Tuesday as investor optimism over looming trade talks was knocked by news the White House is moving toward possible restrictions on capital flows into China. Treasuries and gold advanced.
TSX futures down on U.S.-China trade angst (Reuters) Canada’s main stock index futures fell on Tuesday, as trade tensions between the United States and China heightened after Washington blacklisted more Chinese companies ahead of high-level talks in Washington this week.
Oil Falls as U.S.-China Tensions Escalate Before Trade Talks (Bloomberg) Oil fell again, erasing earlier gains, as economic tensions between the U.S. and China flared ahead of talks aimed at resolving their long-running trade feud.
European stocks tumble further as Brexit, trade worries deepen (Reuters) European stocks tumbled further on Tuesday afternoon as worries about fresh uncertainty over Britain’s exit from the European Union and trade talks between China and the United States later this week deepened.
Recruiters pummeled by widespread economic angst (Reuters) Britain’s PageGroup (PAGE.L) and Robert Walters (RWA.L) warned on Tuesday that profit will be hit by a global recruitment squeeze as continuing geopolitical issues such as Brexit and the U.S.-China trade conflict dent economies.
Satellites to spy on smelters for copper traders (Reuters) A service will launch next week for funds managers, traders and miners that uses satellites to keep copper smelters under surveillance to get quick word of when they shut down and ramp up.
White House Zeroes In on Limit to Chinese Stocks in Pension Fund (Bloomberg) The Trump administration is moving ahead with discussions around possible restrictions on capital flows into China, with a particular focus on investments made by U.S. government pension funds, people familiar with the internal deliberations said.
Trudeau, rivals trade barbs in battle to break election logjam (BNN) Justin Trudeau took fire from all sides in the only English-language leaders debate ahead of an Oct. 21 vote that polls suggest remains the Canadian prime minister’s to lose.
Market Overview: US 10yr note futures are up 0.202% at 131-25, S&P 500 futures are down -0.6% at 2920, Crude oil futures are down -1.54% at $51.94, Gold futures are up 0.35% at $1509.7, DXY is down -0.06% at 98.905, CAD/USD is up 0.05% at 0.751.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.435% | 2 Year | 1.43% |
| 5 Year | 1.28% | 5 Year | 1.35% |
| 10 Year | 1.259% | 10 Year | 1.522% |
| 30 Year | 1.452% | 30 Year | 2.019% |
US Economic Data
| 06:00 AM | NFIB Small Business Optimism, Sep Survey: 102.0 Actual: 101.8 Prior: 103.1 |
| 08:30 AM | PPI Final Demand MoM, Sep Survey: 0.10% Prior: 0.10% |
| PPI Ex Food and Energy MoM, Sep Survey: 0.20% Prior: 0.30% | |
| PPI Final Demand YoY, Sep Survey: 1.80% Prior: 1.80% | |
| PPI Ex Food and Energy YoY, Sep Survey: 2.30% Prior: 2.30% | |
| 10/08-10/11 | Monthly Budget Statement, Sep Survey: $96.5b Prior: $119.1b |
Canadian Economic Data
| 08:15 AM | Housing Starts, Sep Survey: 220.0k Actual: 221.2k Prior: 226.6k |
| 08:30 AM | Building Permits MoM, Aug Survey: 1.00% Prior: 3.00% |
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