Market Update

US tsy yields 2-4bps higher, 10Y 1.83 (+5bps) after strong Aug Retail Sales (0.4% vs 0.2%), TY futures at new lows for the month, prices having almost completely retraced the Aug-Sep rally. Tsy yield curve continuing steeper with 3M10Y +3bps at 15bp inverted from late August low -55bps. Bund yields 12-15bps higher since yesterday’s ECB stimulus announcement and whipsaw reaction in bunds, adding to pressure on global yields. GOC yields 1-2bps higher after US data, lagging the move in the US. Active day for primary issuance including $600mln Alta 50s, $300mln Montreal 29s  $500mln Gibson Energy HY 10Y @ 217 which closed 210 mid.

News headlines

Stocks Set for Weekly Gain as Bonds Extend Retreat: Markets Wrap (Bloomberg) U.S. equity futures rose with Asian and European stocks as shares globally headed for a third weekly gain thanks to easing trade fears and a new round of central bank stimulus. Treasury yields climbed and the dollar slipped.

Futures rise on hint of progress in U.S.-China trade talks (Reuters) Futures for Canada’s main stock index edged higher on Friday as investors cheered signs of progress in U.S.-China trade talks.

Oil Set for Weekly Drop as IEA Warns OPEC Faces Looming Surplus (Bloomberg) Oil is set for its biggest weekly decline in nearly two months as the International Energy Agency warned of a looming supply glut.

Trump trade-war aid sows frustration in farm country (Reuters) The U.S. government is paying Texas cotton farmer J. Walt Hagood $145 an acre for losses related to U.S. President Donald Trump’s trade policies. But Minnesota soybean farmer Betsy Jensen will get just $35 an acre.

China to exempt U.S. pork, soybeans from additional tariffs: Xinhua (Reuters) China will exempt some agricultural products from additional tariffs on U.S. goods, China’s official Xinhua News Agency said Friday, in the latest sign of easing Sino-U.S. tensions before a new rounds of talks aimed at curbing a bruising trade war.

Time to buy? Argentina’s bargain basement stocks start to gain appeal (Reuters) Argentina’s stocks, which crashed last month to multi-year lows, are starting to lure in hardy investors tempted by bargain basement prices, even as the country teeters on the brink of default ahead of a general election next month.

Democrats in presidential debate hint at no swift end to China tariffs (Reuters) Democratic presidential hopefuls criticized President Donald Trump’s trade war with China but gave no hint they would work toward a quick resolution if elected, pledging during their debate on Thursday to hold Beijing accountable for “corrupt” practices.

Shopify helps power TSX to new all-time high (BNN) Canadian stocks climbed into uncharted territory Thursday.

Market Overview: US 10yr note futures are down 0% at 129-14, S&P 500 futures are up 0.3% at 3022.75, Crude oil futures are down -0.05% at $55.06, Gold futures are up 0.48% at $1514.7, DXY is down -0.3% at 98.017, CAD/USD is up 0.05% at 0.7566.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.612% 2 Year 1.726%
5 Year 1.472% 5 Year 1.652%
10 Year 1.455% 10 Year 1.794%
30 Year 1.674% 30 Year 2.274%

US Economic Data

08:30 AM Import Price Index MoM, Aug  Survey: -0.50%  Prior: 0.20%
     Import Price Index YoY, Aug  Survey: -2.00%  Prior: -1.80%
     Retail Sales Advance MoM, Aug  Survey: 0.20%  Prior: 0.70%
     Retail Sales Ex Auto MoM, Aug  Survey: 0.10%  Prior: 1.00%
     Retail Sales Ex Auto and Gas, Aug  Survey: 0.20%  Prior: 0.90%
10:00 AM U. of Mich. Sentiment, Sep P  Survey: 90.80  Prior: 89.80
     Business Inventories, Jul  Survey: 0.30%  Prior: 0.00%

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