Market Update
US tsys following UK gilts lower on key Brexit developments, US 10Y 1.71% (+4bps), heavy volume for 2nd day above 560k TY contracts. UK gilt yields 5-8bps higher on positive news after EU rep Barnier had constructive meeting with UK Brexit secretary Barclay, GBP up another 1.4% after 2% rally yest to reach the highest since June. More optimism on trade , Trump/Liu meeting scheduled for this aft, comments yest from Trump about China being ‘nice in trade talks’. Crude +1.4% 54.25 after Iran tanker hit by missile with Saudi Arabia being blamed GOCs lower, yields 2-5bps higher led by the short end before Sep Labour Force data – 7.5K exp after Aug 81k with the unemployment rate unch at 5.7%
News headlines
Stocks Rally on Trade-Talk Optimism; Pound Surges: Markets Wrap (Bloomberg) Stocks rallied on Friday amid growing hopes that the U.S. and China can negotiate a trade truce as high-level talks progress into a second day. Treasuries fluctuated after Thursday’s slump while the pound surged on optimism for a Brexit deal.
TSX futures rise on higher oil prices (Reuters) Canada’s main index futures rose on Friday, as oil prices jumped on reports of missile attacks on an Iranian tanker in the Red Sea near Saudi Arabia.
Oil jumps above US$60 as Iran tanker attack reignites mideast risk (BNN) Oil jumped back above US$60 a barrel after reports of a missile strike on an Iranian tanker near the Saudi Arabian port city of Jeddah reignited fears over military escalation in the world’s most important crude-producing region.
Spend more if you want ECB to raise rates, Draghi tells governments (Reuters) Euro zone governments can help the European Central Bank raise interest rates sooner if they loosen their own purse strings to support the economy, ECB President Mario Draghi said on Friday.
Wall Street Week Ahead: Bruised U.S. banks expected to report third quarter earnings decline (Reuters) The biggest U.S. banks are expected to kick off the earnings season on a sour note next week due to falling interest rates, which may have pressured net interest margins enough to cause the sector’s first year-over-year earnings per share decline in three years.
Rising old used car prices help push poor Americans over the edge (Reuters) For America’s working poor, an often essential ingredient for getting and keeping a job – having a car – has rarely been more costly, and millions of people are finding it impossible to keep up with payments despite prolonged economic growth and low unemployment.
With U.S. tariffs looming, China drums up hope for a partial trade deal (Reuters) A Chinese state newspaper said on Friday that a “partial” trade deal would benefit China and the United States, and Washington should take the offer on the table, reflecting Beijing’s aim of cooling the row before more U.S. tariffs kick in.
Market Overview: US 10yr note futures are down -0.323% at 130-09, S&P 500 futures are up 0.99% at 2970, Crude oil futures are up 1.51% at $54.36, Gold futures are down -0.79% at $1489, DXY is down -0.38% at 98.327, CAD/USD is down -0.04% at 0.7527.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.584% | 2 Year | 1.579% |
| 5 Year | 1.445% | 5 Year | 1.528% |
| 10 Year | 1.441% | 10 Year | 1.703% |
| 30 Year | 1.612% | 30 Year | 2.19% |
US Economic Data
| 08:30 AM | Import Price Index MoM, Sep Survey: 0.00% Prior: -0.50% |
| Import Price Index ex Petroleum MoM, Sep Survey: -0.10% Prior: 0.00% | |
| Import Price Index YoY, Sep Survey: -2.10% Prior: -2.00% | |
| Export Price Index MoM, Sep Survey: -0.10% Prior: -0.60% | |
| Export Price Index YoY, Sep Survey: — Prior: -1.40% | |
| 10:00 AM | U. of Mich. Sentiment, Oct P Survey: 92.0 Prior: 93.2 |
Canadian Economic Data
| 08:30 AM | Net Change in Employment, Sep Survey: 7.5k Prior: 81.1k |
| Unemployment Rate, Sep Survey: 5.70% Prior: 5.70% | |
| Hourly Wage Rate Permanent Employees YoY, Sep Survey: 3.80% Prior: 3.80% | |
| Full Time Employment Change, Sep Survey: 20.8 Prior: 23.8 | |
| Part Time Employment Change, Sep Survey: -7.7 Prior: 57.2 | |
| Participation Rate, Sep Survey: 65.7 Prior: 65.8 |
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