Market Update
- US tsys advancing in NY trade after quiet, range bound o/n session on extremely light volume (135k TY), with Japan closed today and the mkt setting up for the Fed and BOJ on Wednesday. German govt bonds lower, yield curve steeper. MNI story quoted ECB sources as saying ECB will stay put until the end of the year. Belgium long dated supply also weighed on l.t. bunds – E850mln 2047 bonds at 1.136% vs 1.09% in July. European stocks up 1.2% led by financials, crude rebounding 1.3% at 43.60 on escalating conflict in Libya preventing the resumption of exports. GOCs off slightly, curve unch – 2s/10s ~6bps steeper over the week with the BOC set to auction 2s this thurs – $3.9bln reopened Nov 18s. Provi spds in 0.5bps this morn after closing 1bp tighter Friday – supply less likely before Fed and BOJ meetings on Wed. Ont 10/30 credit curve ~0.5bps flatter since reaching new wides on Thursday at 14.5bps – decent buying of longs seen on Friday supported by $4.25bln CMB 26s dropping out of the long index as well.
News headlines
- Stocks Rally as Crude Rebounds; Dollar Slides Before Fed Meeting (Bloomberg) Stocks rose around the world, buoyed by higher commodities prices, and the dollar weakened before central bank policy meetings this week. The Stoxx Europe 600 Index gained the most in more than two weeks. Crude rebounded from a one-month low as fighting disrupted supplies from Libya, boosting the currencies of oil-exporting nations.
- For Yellen, a September Fed surprise could close confidence gap (Reuters) Market volatility is low, U.S. census data shows income gains have reached the middle class, and workers are clawing back a larger share of national income. For now, at least, no international risk stands out and inflation may even be picking up.
- Oil climbs as Venezuela sees output deal (Reuters) Oil prices rose on Monday from multi-week lows after Venezuela said OPEC and non-OPEC producers were close to a deal to stabilize the market and as clashes in Libya disrupted attempts to boost crude exports. Brent crude futures were at $46.32 per barrel at 1043 GMT, up 55 cents from their previous settlement and off an earlier peak of 46.62. U.S. crude was up 61 cents, or 1.4 percent, at $43.64 a barrel.
- China big city home prices surge in August adding to worries (Reuters) Shenzhen lost its place as the hottest spot in China’s property market in August, but the tech boomtown bordering Hong Kong remained one of the major cities driving rapid price growth as concerns mount over funds pouring into property. Prices for new homes rose 36.8 percent in Shenzhen from a year ago, cooling from 40.9 percent in July, allowing the coastal city of Xiamen to take over as the city in China with the fastest rising prices.
- Hard Brexit will cost City of London its hub status, warns Bundesbank boss (TheGuardian) The head of Germany’s central bank has warned that London’s position as a financial centre would be dealt a severe blow if the UK left the single market because banks would be denied the right to operate across the 27 remaining members of the EU.
- Ottawa to impose a national carbon price on the provinces (The Globe And Mail) The Liberal government will move this fall to impose a minimum, national carbon price on provinces that fail to adopt their own pricing system for reducing greenhouse-gas emissions, a plan that is adamantly opposed by some key premiers.
- Quebec pension fund ups stakes in infrastructure test case (Reuters) Quebec’s public pension fund, the Caisse, is about to take on one of its toughest investment challenges yet – helping the commuters of Montreal. Keen to boost returns, Canada’s second-biggest pension fund is financing and overseeing the construction of a new 67 kilometer (41.6 miles) public transit system in Montreal, the third largest automated transportation system in the world behind those in Dubai and Vancouver.
Overnight markets
- Overview: US 10yr note futures are up 0.0479% at 130-15, S&P 500 futures are up 0.41% at 2141.25, Crude oil futures are up 1.46% at $43.66, Gold futures are up 0.48% at $1316.5, DXY is down -0.27% at 95.847.
US Economic Data
- 10:00 AM: NAHB Housing Market Index, Sep, est. 60 (prior 60)
Canadian Economic Data
- 10:00 AM: Bloomberg Nanos Confidence Index, Sep 16 (prior 57.7)
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, David Leclair-Legault
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230