Market Update

Both US tsys & GOCs unch to slightly lower, US 10Y 2.22%, GOC 10Y 2.095%, Can/US 10Y +0.5bps @ 12bps. Light volume in TY futures overnite, Fed Kashkari (dove) said inflation remains lows, sees little sign of overheating.  Core European bonds lower , no data, just 2Y German supply, month end extension flows expected to be limited by small extension – 0.06Y for Euro Agg below avg.  Provi spds continuing to narrow yest despite a Jumbo Ontario long deal – $1.5bln longs @ 80.5 – now 80/79.  This morning Winnipeg Airports Authority in the mkt with a thirty year @ ~122 or  Onts + 42.  BCE in the mkt – reopened Oct 22s @ ~103, new 10Y Sep 29 27 @ ~ 153

News headlines 

Citi Says Get Ready for an Oil Squeeze (Bloomberg) Five countries in the group — Libya, Nigeria, Venezuela, Iran and Iraq — may already be pumping at their maximum capacity this year, Ed Morse, the bank’s global head of commodities research, said in an interview. Rather than a surge in output, there’s a risk of a market squeeze emerging as early as 2018, driven by those nations because of weaker investment in exploration and development, he said.

Dollar jumps to 1-month high vs. euro ahead of Yellen speech (MarketWatch) The dollar climbed against most other currencies on Tuesday, rising to a one-month high against the euro as traders continued to digest the German election and looked ahead to a speech on monetary policy from Federal Reserve Chairwoman Janet Yellen.

Alstom and Siemens rail deal runs into French political concerns (Reuters) Siemens is expected to opt for a deal with Alstom rather an alternative with Canada’s Bombardier (BBDb.TO)

Finance Minister ​Bill Morneau convinced tax reforms needed (CBC) Morneau argues the changes will not affect the vast majority of farmers as some have claimed. Nor will they prevent small businesses from using income sprinkling, distributing revenues in paycheques to family members, where those family members are actually working for the business.

Upcoming consumer confidence data could be key (CNBC) The consumer confidence index, published by the Conference Board, is due for release on Tuesday shortly after the opening bell. The consumer confidence index, published by the Conference Board, is due for release on Tuesday shortly after the opening bell.

Overnight markets 

Overview: US 10yr note futures are up 0.087% at 125-27, S&P 500 futures are down -0.09% at 2497.25, Crude oil futures are up 1.26% at $51.3, Gold futures are down -0.24% at $1294.4, DXY is up 0.43% at 92.568, CAD/USD is down -0.22% at 0.8121.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.61% 2 Year 1.435%
5 Year 1.816% 5 Year 1.86%
10 Year 2.11% 10 Year 2.246%
30 Year 2.444% 30 Year 2.779%

US Economic Data

9:00 AM S&P CoreLogic CS 20-City MoM SA, Jul. 0.2% (prior 0.11%)
S&P CoreLogic CS 20-City YoY NSA, Jul. 5.7% (prior 5.65%)
10:00 AM New Home Sales, Aug. 585 K  (prior 571K)
New Home Sales MoM, Aug. 2.5% (prior -9.4%)
Conference Board Consumer Confidence, Sep. 120 (prior 122.9)
Richmond Fed Manufacture Index, Sep. 13 (prior 14)

Canadian Economic Data

There is no economic data scheduled for today.


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