Market update
US tsys trading higher , US 10Y 2.06 (-1bp), giving up slight o/n gains after initial claims fell to lowest level since July . Tsy curve ~2bps flatter before $13bln 30Y auction this aft & FOMC minutes. Big news o/n was BOE decision – short end gilt curve is ~1bp flatter on dovish outlook for rates & inflation (inflation expected to remain below 1% until spring 2016). GOCs are slightly higher, curve flatter, spds unch vs tsys after strong Sep housing starts (three yr high). Provis opening 1bp wider after rally fizzled yest on supply ($1.4bln ) with Alberta rumoured for today.
News headlines
- BOE Signals Rate Can Stay Low as Inflation Weakness Persists (Bloomberg) Bank of England policy makers said the U.K. economy is withstanding international pressures, while also signaling they have room to keep the benchmark rate at a record low as inflation weakness persists.
- German exports in steepest fall in almost 7 years (Marketwatch) Germany’s trade surplus missed forecasts in August, as exports registered their steepest decline in almost seven years. Germany’s trade surplus, adjusted for seasonal swings and calendar effects, narrowed to 19.6 billion euros ($22.1 billion) from a revised EUR22.4 billion in July, undershooting forecasts of EUR22.5 billion, data from the Federal Statistical Office showed Thursday.
- Deutsche Bank Sees Big Loss on Write-Down in Corporate Banking (WSJ) Deutsche Bank AG warned it will take a €5.8 billion ($6.5 billion) charge on assets in its investment bank and retail- and private-banking operations for the third quarter and said it could cut its dividend this year.
- HSBC’s Major, Who Called 2014 Bond Rally, Cuts Yield Forecasts (Bloomberg) Steven Major is counting on the Federal Reserve to help him repeat history. The London-based head of fixed-income research at HSBC Holdings Plc, who stood out in 2014 by correctly predicting that 10-year Treasury yields would fall, cut his end-of-2016 yield forecast to just 1.5 percent, from 2.8 percent previously.
- CIBC unveils bold new targets in technology-driven shift (G&M) Canadian Imperial Bank of Commerce said it will cut $600-million in costs and drive profit growth to 10 per cent a year by 2018, as it shifts resources to technology-driven banking.
Overnight markets
- Overview: IG24 5Y 79.587/80.220 (+0.653), US 10yr note futures are up +0.08% at 128-28+, S&P 500 futures are down -0.38% at 1979.75, Crude oil futures are up +1.06% at 48.31, Gold futures are down -0.91% at $1138.20, DXY is up +0.03% at 95.528.
US Economic Data
- Initial jobless claims came in at 277K for the week ending October 3rd, higher than expected (271K) and higher than prior week (267K).
- Continuing claims decreased to 2191K from 2244K and lower than expected (2230K).
- Fed minutes from September 16-17 FOMC meeting will be release at 14:00.
Canadian Economic Data
- Housing starts came in at 230.7K in September versus August revised 214.3K.
- New housing price index increased 0.3% MoM (+1.3% YoY) in August compared to July 0.1% MoM (1.3% YoY).
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
Fax: (514)-861-3230