Market Update
US tsys higher, 10Y 2.35% (-1bp) ahead of thin calendar with JOLTs job opening data and FOMC minutes from Sep meeting at 2:00PM. The US tsy auctions $24bln in 3Y and $20bln in 10Y notes as well with the latter ~17bps higher in yield than at the last 10Y auction on Sep 12th. Core Euro bonds lower, 10Y bund/tsy spd 3bps tighter as geopolitical risks from Catalonia subside, rally in EU peripherals. GOCs unch, 10Y 2.12%, volatility has collapsed over the last month with the 10Y benchmark in a ~$0.30 corridor. Provincials unch , 10Y supply rumoured.
News headlines
Madrid Keeps Pressure on as Catalans Blink on Independence (Bloomberg) Spain maintained its hard line against Catalonia’s secession campaign after the regional leader in Barcelona stopped short of the declaration of independence his allies wanted.
Trump Says He’ll Adjust His Tax Plan in the Next Few Weeks (Bloomberg) President Donald Trump said Tuesday he plans to make changes to his tax plan within the next few weeks, while dismissing concerns that his public spat with Senator Bob Corker would scuttle an overhaul.
Japan Shares Rise With Nikkei 225 Closing at Highest Since 1996 (Bloomberg) Japanese shares advanced, with the Nikkei 225 Stock Average closing at its highest since December 1996, bolstered by companies in industries ranging from technology to retail.
Sears Canada going out of business, laying off 12,000 (Toronto Star) Once a titan of Canadian retail, Sears Canada announced Tuesday that it is going out of business, putting 12,000 people out of work and shuttering all operations nationwide.
Canada Housing Starts Posted Rare Drop in September (The Wall Street Journal) Canadian housing starts fell in September after eight straight monthly gains, although the level remains elevated and suggest residential construction lifted economic growth in the third quarter.
Canada’s indebted households vulnerable to shock: BOC’s Wilkins (Reuters) Canada’s household sector is vulnerable to any kind of negative shock due to its high level of indebtedness, but stress tests show Canada’s banking system should weather a drop in house prices, Bank of Canada Senior Deputy Governor Carolyn Wilkins said on Tuesday.
Overnight markets
Overview: US 10yr note futures are down -0.037% at 125-07, S&P 500 futures are down -0.13% at 2545.25, Crude oil futures are up 0.1% at $50.97, Gold futures are down -0.08% at $1292.8, DXY is down -0.13% at 93.17, CAD/USD is down -0.04% at 0.7993
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.553% | 2 Year | 1.513% |
| 5 Year | 1.777% | 5 Year | 1.95% |
| 10 Year | 2.121% | 10 Year | 2.346% |
| 30 Year | 2.483% | 30 Year | 2.881% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Oct 6th -2.1% (-0.4% prior) |
| 10:00 AM | JOLTS Job Opening, Aug est 6125 (6170 prior) |
| 14:00 PM | FOMC Meeting Minutes, Sep 20th |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230