Market update
US tsys trading higher, US 10Y 2.05 (-2bps) on ‘risk off’ as China equities fell 3.0%, commodities lower, Japanese exports weak (see above) – thou Nikkei rose 1.9% on spec of more BOJ easing. Core Euro bonds higher curves flatter led by 30Y bunds with 2Y lagging on weaker 2Y Schatz auction. GOCs higher, 10s ~4bps narrower on the curve before BOC – were not looking for any change in policy as the BOC is likely to point to a rebound in exports and an improvement in forward looking indicators. Provis opening unch, Ont 25s traded up earlier @94.5 – fairly remarkable given another 3bp rally yest. QC expected to price its 10Y EUR deal.
News headlines
- Japan export growth slows sharply, raising fears of recession (Reuters) Japan’s annual export growth slowed to a crawl in September as shrinking sales to China hurt the volume of shipments, raising fears that weak overseas demand may have pushed the economy into recession.
- ECB sees signs of thaw in bank lending (FT) A closely watched survey of the eurozone’s banks shows they are relaxing their loan standards for businesses, in a sign of growing confidence about economic prospects in the European currency area.
- Banks Facing Tough Times Pull Out Visa…Shares (WSJ) U.S. banks facing charges or losses this earnings season have been able to dip into a multibillion-dollar piggy bank—shares they hold in Visa Inc.— to offset the damage.
- Credit Suisse to Launch $6.3 Billion Capital Increase (WSJ) Credit Suisse Group AG announced plans on Wednesday to raise roughly 6 billion francs ($6.3 billion) in fresh capital and slash costs, as the Swiss bank delivered a disappointing set of quarterly results.
- Saudis Risk Draining Financial Assets in 5 Years, IMF Says (Bloomberg) Saudi Arabia may run out of financial assets needed to support spending within five years if the government maintains current policies, the International Monetary Fund said, underscoring the need of measures to shore up public finances amid the drop in oil prices.
Overnight markets
- Overview: IG24 5Y 76.676/77.297 (-0.128), US 10yr note futures are up +0.16% at 128-24+, S&P 500 futures are up +0.45% at 2029.5, Crude oil futures are down -1.99% at 45.37, Gold futures are down -0.09% at $1176.6, DXY is down -0.04% at 94.873.
US Economic Data
- MBA mortgage applications came in this morning at 11.8% for the week ending October 16th, versus prior week -27.6% decrease.
Canadian Economic Data
- Bank of Canada overnight lending rate decision will be release at 10:00 and is expected to remain at 0.50%.
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