09/10/2015

Market update

US tsys opening lower, US 10Y 2.13 (+2.5bps) on higher stocks, commodities. Tsys mostly sideways in o/n session, declining in early NY trading with German 10Y bunds. ECB Draghi comments that Euro area howing ‘signs of resilience’  and that inflation set to rise on base effects also weighing on bunds.  GOCs lower , spds ~1bp tighter vs tsys after giving up 2 bps in yesterday’s pullback. Little reaction to slightly better than exp Sep employment (12.1k vs 10k) thou gain due to rise in part time as full time fell 62k. Provi spds opening 0.5bps tighter after late day buying on screens closed spds 1bp tighter – Ont 46s 110.5/109.5, Ont45/25 bx 9.8/9.4. QC 48s 116.5/115.5, QC/Ont 45 rl 6.3/6.2 – 0.3bps tighter on the week.

News headlines

  • A Dell-EMC deal could choke the debt market (Fortune) Dell may be looking to do the right deal at the wrong time. The computer maker and private equity firm Silver Lake Partners are reportedly in advanced talks to buy EMC   in a leveraged buyout.
  • Key Theme in Corporate Credit Risk Is That There Isn’t One: Ballard (Bloomberg) Corporate event risk has recently been on the rise, but the diversified and idiosyncratic nature of each case suggests that any future scares will remain difficult to foresee and even more difficult to pre-emptively hedge against, writes Bloomberg strategist Simon Ballard.

 

 Overnight markets

  • Overview: IG24 5Y 75.252/75.977 (-1.735), US 10yr note futures are down -0.16% at 128-08+, S&P 500 futures are up +0.22% at 2011.0, Crude oil futures are up +1.46% at 50.15, Gold futures are up +0.76% at $1153.0, DXY is down -0.53% at 94.809.

 

US Economic Data

  • Import price index came in at -0.10% MoM (-10.70% YoY) in September versus August -1.60% MoM (-11.30% YoY).
  • Wholesale Inventories are forecast at 0.0% MoM in August versus -0.1% MoM for previous month.
  • Wholesale trade sales are expected at -0.4% MoM in August lower than July -0.3% MoM increase.

 

Canadian Economic Data

  •  Net change in employment increased 12.1K in September compared to August 12.0K and the 10.0K forecasted.
  • Unemployment rate came in at 7.1% in September 0.1% higher than August.
  • BoC senior loan officer survey and Business outlook future for 3Q 2015 will be release at 10:30.

 

 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