Market Update

US tsys higher, yields 2-3bps lower, 10Y 1.70%(-2.4bps), heavier volume in TY futures, S&P futures unch, crude -0.60%.  Core Euro bonds seeing strong rally on weak data, bund curve 5bps flatter with the 10Y -6bps @ -0.58% –  German Man PMI  fell to 41.4 in Sep from 43.5, well below 44 expected and the lowest since June 2009.  Meanwhile the Service PMI unexpectedly declined as well, to 52.5 from 54.8. Gilts tighter vs bunds – the Supreme Court expected to give an update on the UK govt’s decision to prorogue parliament. GOCs higher, 1bp narrower vs 2Y tsys – July Wholesale sales came in much stronger than exp 1.7% vs unch,  some relief after July Retail Sales disappointed.

News headlines

Gloomy European Data Hits Stocks as Bonds Advance: Markets Wrap (Bloomberg) U.S. equity futures fluctuated and European stocks retreated as disappointing data in the euro area overshadowed easing concern about trade relations between America and China. Treasuries rose and the common currency slid.

Futures edge up as higher gold offsets lower oil (Reuters) Futures for Canada’s main stock index were slightly higher on Monday, as gains in gold prices on global growth worries offset a pullback in oil prices.

Oil Drops Amid Conflicting Reports About Speed of Saudi Recovery (Bloomberg) Oil fell as traders weighed conflicting reports on whether Saudi Arabia will succeed in restoring its lost production by the end of this month, while concerns over demand returned following gloomy European data.

Markets face major risks over lax climate forecasts, top investors warn (Reuters) Financial markets risk major disruptions by relying on business-as-usual forecasts that underestimate the impact of climate-change policies that are expected to abruptly tighten next decade, a leading group of investors has warned.

Chinese U.S. homebuying to hit eight-year low, says leading property site (Reuters) U.S. home sales to Chinese buyers are likely to drop to an eight-year low in the year ending next March as a prolonged Sino-U.S. trade war hits demand, according to estimates from Chinese real estate website Juwai.com.

Graphic: Repo ructions – Then and now (Reuters) Investors were jolted last week when rates in an obscure part of the U.S. lending market spiked, prompting fears of bigger problems for the financial market and broader economy.

Draghi’s Highway to Inflation Goal Risks Ending in Taper Tantrum (Bloomberg) The European Central Bank’s new message on how long it’ll keep interest rates low is supportive for the economy, but could prove risky for markets.

Market Overview: US 10yr note futures are up 0.349% at 130-05, S&P 500 futures are up 0.03% at 2990.25, Crude oil futures are down -0.57% at $57.76, Gold futures are up 0.64% at $1524.8, DXY is up 0.2% at 98.713, CAD/USD is up 0.13% at 0.753.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.541% 2 Year 1.669%
5 Year 1.387% 5 Year 1.579%
10 Year 1.348% 10 Year 1.694%
30 Year 1.505% 30 Year 2.135%

US Economic Data

08:30 AM Chicago Fed Nat Activity Index, Aug  Survey: -0.03  Prior: -0.36
09:45 AM Markit US Manufacturing PMI, Sep P  Survey: 50.4  Prior: 50.3
     Markit US Services PMI, Sep P  Survey: 51.4  Prior: 50.7
     Markit US Composite PMI, Sep P  Survey: —  Prior: 50.7

Canadian Economic Data

08:30 AM  Wholesale Trade Sales MoM, Jul  Survey: 0.00%  Prior: 0.60%
10:00 AM Bloomberg Nanos Confidence, Sep 20  Survey: —  Prior: 56.7

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, 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