Market update

US tsys  jumping after  soft core  retail sales & PPI , buy stops being triggered in Dec 10Y futs as well as German bunds on the weaker data. Tsys were already higher overnite on bull flattening rally in core European bonds led by gilts on weak stocks  and rise in UK jobless. Positive sentiment in the tsy market was at the highest level since March last week according to the latest JPM Treasury Client survey. WSJ article (see above)notes there is an increasing no. of Fed officials feeling that a rate rise this year is not appropriate given the state of the US economy – todays PPI/retail sales certainly validates a cautious stance on rate hikes. In Canada, GOCs are higher, curve 1bp flatter led by 10s. 5Y auction atnoon –  WI roll tighter today 13.7/13.6. Provis slightly wider (0.5bps) with lower Cda yields , rumours of 10Y Ontario  & possibly Sasky today.

News headlines

  • Wells Fargo Posts Stronger (WSJ) Results Wells Fargo & Co. said its third-quarter profit and revenue rose more than expected, though the nation’s fourth-largest bank by assets continued to deal with a low interest-rate environment.

 Overnight markets

  • Overview: IG24 5Y 78.898/79.531 (-0.195), US 10yr note futures are up +0.36% at 129-10+, S&P 500 futures are down -0.05% at 1993.0, Crude oil futures are down -0.15% at 46.59, Gold futures are up +0.73% at $1173.9, DXY is down -0.54% at 94.244.

US Economic Data

  • MBA mortgage applications came in this morning at -27.6% for the week ending October 9th, versus prior week 25.5% increase.
  • Retail sales increased 0.1% MoM in September, below expectations (0.2%), after increasing 0.0% the previous month.
  • Retail sales excluding automobiles decreased -0.3% in September, compared to consensus of a -0.1% loss, and a revised -0.1% decrease in August.
  • PPI came in at -0.5% MoM (-1.1% YoY) in September versus August 0.0% MoM (-0.8% YoY).
  • PPI core decreased -0.3% MoM (+0.8% YoY) in September compared to previous month 0.3% MoM (0.9% YoY).
  • Business inventories are forecast to increase 0.1% MoM in August, equal to previous month increase.
  • Fed will release beige book at 14:00.

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