09/10/2019

Market Update

Trading weaker across the curve, just off recent lows on moderate volumes (TYZ>325k), US/China trade headlines (soybean purchases, China open to partial trade deal despite tech blacklist) spurring risk-on move, equities firmer (ESZ9 +23.0). China is open to a partial trade deal with the US despite a tech blacklist; FT reporting China to propose buying more soybeans (though corrected from original $10bln increase to say 10 tonne increase); Global Times editor Hu saying reports China delegation to stay for full agenda despite reports the D.C. visit would be cut short.  All this the morning after Fed`s Powell tipped don’t-call-it-QE bill purchases; 3M10Y opened flatter from Tues but has re-steepened, last -14.7bps.- In the end, equities higher, and Tsys a little weaker. The 2-Yr yield is up 2bps at 1.4395%, 5-Yr is up 2.6bps at 1.3777%, 10-Yr is up 2.9bps at 1.5579%, and 30-Yr is up 2.7bps at 2.0566%.  Dec 10-Yr futures (TY) down 5.5/32 at 131-17 (L: 131-14.5 / H: 131-26) Powell speaking again today at 10h30 at Fed Listens event in K.C.; Sep FOMC minutes out at 14h00.

News headlines

Stocks Rise on Fresh Trade-Deal Hopes; Dollar Dips: Markets Wrap (Bloomberg) U.S. index futures jumped along with stocks in Europe as China revived hopes of progress in trade talks with America this week despite a host of potential headwinds. Gold slipped with Treasuries.

TSX futures rise as Sino-U.S. trade concerns ease (Reuters) Futures for Canada’s main stock index pointed to a higher opening on Wednesday, after latest media reports eased U.S.-China trade worries.

Oil Rises Amid Optimism on Trade Talks, Turkish Military Action (Bloomberg) Oil erased losses amid optimism on trade talks scheduled to take place in Washington and signs of unrest near the border between Turkey and Syria.

China said open to partial U.S. trade deal despite tech blacklist (BNN) China is still open to agreeing a partial trade deal with the U.S., an official with direct knowledge of the talks said, signaling that Beijing is focused on limiting the damage to the world’s second-largest economy.

After spurned play for LSE, Hong Kong bourse to seek deeper China embrace (Reuters) Hong Kong stock exchange boss Charles Li ignited his unrequited overture to the London Stock Exchange with a riff on Romeo and Juliet as a corporate romance, and doused it in a wistful blog reference to the author of ‘Alice in Wonderland’.

Bank of England sets out rules of engagement for Facebook’s Libra (Reuters) The Bank of England set out the rules of engagement that Facebook’s Libra crypto-currency and other new digital payments providers would have to meet before they can open for business in Britain.

China plans to restrict visas for U.S. visitors with ‘anti-China’ links (Reuters) China is planning tighter visa restrictions for U.S. nationals with ties to anti-China groups, people with knowledge of the proposed curbs said, following similar U.S. restrictions on Chinese nationals, as relations between the countries sour.

Venture capital investments in U.S. set for another bonanza year (Reuters) U.S. venture capitalists are expected to pour over $100 billion into startups for a second straight year, following the record sum invested in 2018, according to a report released on Wednesday.

Market Overview: US 10yr note futures are down -0.142% at 131-17, S&P 500 futures are up 0.95% at 2920, Crude oil futures are up 0.99% at $53.15, Gold futures are up 0.37% at $1509.4, DXY is down -0.09% at 99.041, CAD/USD is down -0.17% at 0.7517.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.454% 2 Year 1.433%
5 Year 1.309% 5 Year 1.374%
10 Year 1.298% 10 Year 1.56%
30 Year 1.497% 30 Year 2.064%

US Economic Data

07:00 AM MBA Mortgage Applications, Oct 4  Survey: —  Actual: 5.20% Prior: 8.10%
10:00 AM JOLTS Job Openings, Aug  Survey: 7250  Prior: 7217
     Wholesale Trade Sales MoM, Aug  Survey: —  Prior: 0.30%
     Wholesale Inventories MoM, Aug F  Survey: 0.40%  Prior: 0.40%
02:00 PM FOMC Meeting Minutes, Sep 18
10/09 – 10/11 Monthly Budget Statement, Sep  Survey: $93.0b  Prior: $119.1b

Canadian Economic Data

There is no Canadian economic data for today.

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