Market Update US tsys higher, yields ~2bps lower across the curve, 10Y 3.147%, heavy volume in TY futures (720k). Prices off the highs after 15k block trade in TY futures @6:50am. Equity futures slightly lower, well off mid morning lows (S&P -2.25 from -25). US tsy auctions $39bln in 5Y notes at 1:00ET. Fed Beige Book as well as several Fed speakers scheduled (Bostic, Brainard). Core EGBs higher despite rally in Italy BTPs – the EU flash PMI fell to a two-year low 52.7 this month. GOCs higher, lagging the rally in tsys, 10Y 1bp lower @ 2.44%. BOC expected to raise rates 25bps this morning, focus will be on any growth revisions, as well as possible removal of ‘gradual’ language. At the Sept decision the BOC referred to uncertainty on trade as a reason for holding rates steady, this has cleared somewhat since the signing of the USMCA. Mkts are pricing in an additional three rate hikes by the end of 2019 to 2.50%.
News headlines
Trump directly attacks Fed Chairman Powell, saying ‘Obama had zero’ interest rates. (CNBC) President Donald Trump directly accused Federal Reserve Chairman Jerome Powell of endangering the U.S. economy by raising interest rates, according to The Wall Street Journal. Trump accused Powell of endangering the U.S. economy by raising interest rates. The U.S. president indicated that he sees the current performance of the economy as a competition between himself and President Barack Obama.
Saudi oil chief says OPEC is in ‘produce as much as you can’ mode. (BNN Bloomberg) Saudi Arabia gave the strongest indication yet that it’s trying to stop oil prices from rising further, saying that OPEC and allies are in a “produce as much as you can mode” to assure customers that they can meet demand and remove any uncertainties about looming shortages.
Inside S&P 500, most stocks in correction or bear market. (Reuters) According to Reuters, 353 S&P 500 stocks have fallen into a correction — down 10% from their peaks — and 179 of those are in a bear market — down at least 20% from their peak.
Deutsche Bank ‘on track’ for 1st full-year profit since 2014. (Financial Post) Deutsche Bank’s net profit fell 65 per cent in the third quarter but CEO Christian Sewing said the bank made progress cutting costs and would show its first full-year profit since 2014.
Ford hires new China chief to tackle daunting turnaround task. (Reuters) Ford Motor Co (F.N) has hired a new chief for its troubled China operations, ending a nine-month search after the previous head suddenly quit and tasking him with fixing a deep sales slump in the world’s biggest car market.
Saudi Arabia reassures boycotting banks, prince to address forum. (Reuters) Saudi Arabia said on Wednesday it would not penalize foreign banks boycotting an investment forum in a message of reassurance for a gathering overshadowed by a global outcry over slain journalist Jamal Khashoggi.
Worries on demand, profit outlook and trade dent global tech shares. (Reuters) Global tech stocks have lost about $1 trillion or 9 percent of market value this month, Refinitiv data showed, hurt by worries over slowing global demand, valuations and trade tensions between the United States and China. The losses were also exacerbated by a rise in U.S. yields, which shot up to a near 7-1/2 year high this month and prompted investors to leave risky sectors and move into higher yielding bonds. An analysis of 1,701 global technology firms – each with a market value of more than $100 million – showed that their combined market value was down to about $10.58 trillion on Oct. 23 from $11.64 trillion on Oct. 1.
Boeing raises guidance as plane sales swell. (Reuters) Boeing (BA.N) topped analysts’ forecasts for quarterly profit on Wednesday and raised its forecasts for annual profit as it continued to benefit from a boom in global air travel and demand for airplanes.
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Oct 19th 4.9% (-7.1% prior) |
| 9:00 AM | FHFA House Price Index MoM, Aug est 0.3% (0.2% prior) |
| 9:45 AM | Markit US Manufacturing PMI, Oct P est 55.3 (55.6 prior) |
| Markit US Services PMI, Oct P est 54.0 (53.5 prior) | |
| Markit US Composite PMI, Oct P (53.9 prior) | |
| 10:00 AM | New Home Sales, Sep est 625k (629k prior) |
| New Home Sales, Sep est -0.6% (3.5% prior) | |
| 14:00 | U.S. Federal Reserve Releases Beige Book |
Canadian Economic Data
| 10:00 AM | Bank of Canada Rate Decision, Sep 5th est 1.50% (1.50% prior) |
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, Hugues Savard
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