10/11/2015

cti2015header-morning comments web

Market update

US tsys trading higher, yet well off earlier highs which saw the 10Y yield fall to 2.315, now 2.33 (-1bp) with the curve ~2bps steeper. Big new o/n was China inflation nos (see above) coming in below exp (CPI 1.3 vs 1.5). Core Euro bonds higher, with 10Y bund/tsy spd ~2.5bps wider as bunds outperform on buying in longs and remarks by ECB Liikannen that downside risks remain to EU growth & inflation. The US auctions $24bln 10Y notes at 1:00PM. GOCs are higher, curve 2s/10s 1.5bps steeper. Provis opening unch, could still see Ont/Qc supply even with shortened session. Genworth roadshow this week, Genworth MI Canada was affirmed by S&P at BBB+ back in Sept.

 

News headlines

  • China’s Inflation Slows in October (WSJ) China’s consumer inflation dipped further last month due to lower food prices, adding to what economists say are signs of slack demand and slowing in the world’s second-largest economy.
  • Fed’s Rosengren strikes upbeat note on rise in interest rates (FT) The US economy has suffered little collateral damage from the turbulence in emerging economies and financial markets during the summer, leaving the way open for the Federal Reserve to consider lifting interest rates, a senior policymaker has said.
  • Beyond Banking: under attack on all sides (FT) It is more than seven years since the height of the financial crisis, but the run of disastrous banking news during the past few weeks has revived bad memories. Profit warnings, mass job cuts, share price plunges and defensive capital raisings have abounded.

Overnight markets

  • Overview: IG24 5Y 77.123/77.839 (+0.524), US 10yr note futures are up +0.05% at 126-03, S&P 500 futures are down -0.22% at 2068.5, Crude oil futures are down -0.30% at 43.74$, Gold futures are up +0.02% at $1088.3, DXY is up +0.38% at 99.353.

 

US Economic Data

  •  NFIB Small Business Optimism Index for October came in at 96.1 compared to the consensus of 96.4 and prior month (96.1).
  • Import price index came in at -0.5% MoM (-10.50% YoY) in October versus September -0.6% MoM (-11.30% YoY).
  • Wholesale Inventories are forecast at 0.1% MoM in September versus 0.1% MoM for previous month.
  • Wholesale trade sales are expected at 0.1% MoM in September higher than August -1.0% MoM.

 

Canadian Economic Data

  • There is no major economic data 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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230