Market Update
Tsys trading higher, yields 1.5-2.5bps lower,10Y 1.735%, avg volume in TY futures (310k). US equity futures lower (S&P -6.0), weighed by earnings from Caterpillar and TI, and further Brexit uncertainty with PM Johnson ready to call an election after yest parliamentary loss on Brexit. Crude -1.0% 53.90, API data showed larger crude inventory build (4.45mln vs 2.23mln exp). GOCs higher in line with tsys, led by the 10Y (1.485% -3bps). BOC Business Outlook Survey noted ‘slight improvement’ in business sentiment and ‘healthy’ investment and hiring plans -overall fairly neutral and unlikely to sway the BOC either way.
News headlines
The cost of climate change: Trial to decide whether ExxonMobil was honest with investors (CNN) A trial in which energy giant ExxonMobil stands accused of misleading investors about the potential impact of climate change regulations on its operations started Tuesday. The New York attorney general brought the suit alleging the company used figures internally that were different from what they disclosed publicly when calculating the impact of laws, taxes and other economic aspects of climate change over the coming decades. The fraud cost investors as much $1.6 billion, the attorney general’s office alleges.
Boris Johnson wins Brexit deal vote but is thwarted on deadline (FT) Boris Johnson won the backing of MPs for his Brexit deal on Tuesday night in a landmark vote in the House of Commons, but a snap election was back on the agenda after MPs derailed his attempt to take Britain out of the EU on October 31. European Council president Donald Tusk proposed offering Mr Johnson a Brexit extension until January 31, after MPs voted against Mr Johnson’s plan to railroad his exit legislation through the Commons in time for the Halloween deadline.
Russia Agrees to Help Turkey Expand Buffer Zone in Syria (WSJ) Russia agreed to help Turkey drive out Kurdish militias from a “safe zone” in northeastern Syria, highlighting Moscow’s flourishing ties with a NATO member and a rebalance of power in war-torn Syria as U.S. troops leave. Turkish President Recep Tayyip Erdogan said he would suspend military action for nearly six days against Kurds who his government views as a terrorist threat to let them evacuate the area. During this period, Russian and Syrian security forces would push any remaining Kurdish fighters away from Turkey’s border.
CN Rail sees profits plateau in third quarter amid ‘softening economy’ (BNNBloomberg) Canada’s largest railroad operator cut its profit outlook for 2019 on Tuesday, saying a weaker economy has eroded rail demand. Canadian National Railway Co. lowered its expectations for adjusted earnings per share to the high single digits, down from predictions of low double-digit growth.
Rogers reports $593M third-quarter profit, cuts revenue forecast (BNNBloomberg) Rogers Communications Inc. cut its financial guidance as it reported a profit of $593 million in its latest quarter, compared with $594 million in the same quarter last year.
The cable and wireless company says it earned $1.14 per diluted share for the quarter ended Sept. 30, down from $1.15 per diluted share a year ago. Revenue totalled $3.75 billion, down from nearly $3.77 billion in the same quarter last year.
Market Overview: US 10yr note futures are up 0.229% at 130-04, S&P 500 futures are down -0.18% at 2989.25, Crude oil futures are down -0.95% at $53.96, Gold futures are up 0.61% at $1496.5, DXY is up 0.01% at 97.537, CAD/USD is down -0.03% at 0.764.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.6% | 2 Year | 1.552% |
| 5 Year | 1.503% | 5 Year | 1.553% |
| 10 Year | 1.489% | 10 Year | 1.731% |
| 30 Year | 1.601% | 30 Year | 2.223% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, 43374 Survey: — )Actual: -11.90% Prior: 0.50% |
| 09:00 AM | FHFA House Price Index MoM, Aug Survey: 0.30% Prior: 0.40% |
| 10:30 AM | DOE U.S. Crude Oil Inventories, 43374 Survey: 3000k Prior: 9281k |
| DOE U.S. Gasoline Inventories, 43374 Survey: -2238k Prior: -2562k | |
| 12:00 AM | Monthly Budget Statement, Sep Survey: $83.0b Prior: $119.1b |
Canadian Economic Data
| 08:30 AM | Wholesale Trade Sales MoM, Aug Survey: 0.30% Prior: 1.70% |
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