Market Update
US tsys unwinding most of earlier gains on Brexit headlines, heavy volume (570k TY futures), yields 1-2 bps lower led by the 7Y , with the 10Y 1.75 (-2bps), UK gilts retracing yest losses as Brexit deal optimism fades, thou latest news on DUP accepting latest proposals. S&P futures -0.3%, crude 53.05 (+0.26). US retail sales expected +0.3% in Sep after 0.4% Aug (BBG), Fed releases Beige Book at 2:00PM. GOCs trailing tsys before Sep CPI – median 2.1% vs 1.9% in Aug.
News headlines
Stocks Drop Amid Hong Kong Stress; Treasuries Gain: Markets Wrap (Bloomberg) American equity-index futures slipped on Wednesday while European shares struggled for traction as tensions over Hong Kong mounted and earnings season rolled on. Treasuries gained and the dollar was steady.
Futures slip on renewed U.S.-China trade war concerns (Reuters) U.S. stock index futures dipped on Wednesday as a new U.S. bill taking a hard line on China stoked fresh concerns about a prolonged trade war, but more positive results from the banking sector provided some relief and signaled a solid start to the third-quarter earnings season.
TSX futures edge up ahead of inflation report (Reuters) Canada’s main stock index futures were slightly higher on Wednesday ahead of the inflation data scheduled later in the day.
Oil Steady After Two Days of Losses as Demand Outlook Worsens (Bloomberg) Oil steadied near $53 a barrel after two days of declines as the fragile economic environment and unresolved U.S.-China trade war continue to deteriorate the outlook for global fuel demand.
U.S. ‘deeply concerned’ about untrackable China ships carrying Iran oil: officials (Reuters) The White House is warning Chinese shipping companies against turning off their ships’ transponders to hide Iranian oil shipments in violation of U.S. sanctions, two senior administration officials said.
Germany eyes emergency measures for Brexit market panic: source (Reuters) Germany could use emergency measures to counter any market panic from a hard Brexit, an official with direct knowledge of the matter said, such as banning bets on falling share prices, a step last used in the financial crisis.
U.S. dollar to remain dominant currency; euro, renminbi rising gradually: UBS survey (Reuters) The U.S. dollar will remain the world’s leading reserve currency over the next 25 years, with the euro and renminbi expected to further increase their share of total central bank reserves, according to UBS’ survey of sovereign institutions including major central banks released on Wednesday.
EU-British Brexit talks to resume in Brussels -UK spox (Reuters) Talks between British and EU negotiators on Brexit will resume in Brussels after a lunch break, a UK spokesman said as last-ditch efforts dragged on to seal a divorce deal this week before Britain is due to leave the bloc on Oct. 31. (Reporting by Gabriela Baczynska)
Market Overview: US 10yr note futures are up 0.241% at 130-03, S&P 500 futures are down -0.17% at 2992.75, Crude oil futures are up 0.59% at $53.12, Gold futures are up 0.03% at $1483.9, DXY is up 0.07% at 98.359, CAD/USD is up 0.07% at 0.7571.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.681% | 2 Year | 1.592% |
| 5 Year | 1.571% | 5 Year | 1.559% |
| 10 Year | 1.545% | 10 Year | 1.734% |
| 30 Year | 1.655% | 30 Year | 2.214% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, Oct 11 Survey: — Actual: 0.50% Prior: 5.20% |
| 08:30 AM | Retail Sales Advance MoM, Sep Survey: 0.30% Prior: 0.40% |
| Retail Sales Ex Auto MoM, Sep Survey: 0.20% Prior: 0.00% | |
| Retail Sales Ex Auto and Gas, Sep Survey: 0.30% Prior: 0.10% | |
| 10:00 AM | NAHB Housing Market Index, Oct Survey: 68 Prior: 68 |
| Business Inventories, Aug Survey: 0.20% Prior: 0.40% | |
| 02:00 PM | U.S. Federal Reserve Releases Beige Book |
| 04:00 PM | Net Long-term TIC Flows, Aug Survey: — Prior: $84.3b |
| Total Net TIC Flows, Aug Survey: — Prior: $43.8b | |
| 10/16 – 10/18 | Monthly Budget Statement, Sep Survey: $83.0b Prior: $119.1b |
Canadian Economic Data
| 08:30 AM | Int’l Securities Transactions, Aug Survey: — Prior: -1.17b |
| CPI NSA MoM, Sep Survey: -0.20% Prior: -0.10% | |
| CPI YoY, Sep Survey: 2.10% Prior: 1.90% | |
| Consumer Price Index, Sep Survey: 136.6 Prior: 136.8 |
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