Market update
US tsys trading sharply higher in NY trading, curve ~ 3 bps flatter as longs outperform along with flattening move seen in German bunds. US 10Y 2.06% (-3bps), 10Y tsy/bund spd 157 highest since August 4th. Bunds were lower on better than expected IFO (108.2 vs 107.8). Quiet start to the week as mkt awaits FOMC, BOJ, tsy supply and debt ceiling – FOMC not expected to hike rates but BOJ may add to record stimulus on Friday given slowing in domestic economy. GOCs trading higher led by 10Y , spds ~1bp tighter vs tsys in the rally. Provis opening with offered tone on no trade, Ont 46 105.5/105, Ont 45/25 10/9.7.
News headlines
- European shares slip as easing expectations fade (Reuters) European shares fell in early trading on Monday as euphoria about the prospect of further central bank policy easing faded, with investors warning against over-confidence ahead of another week of interest rate decisions.
- S. Companies Warn of Slowing Economy (WSJ) Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending.
- Asset managers suffer as oil funds withdraw cash (FT) Global asset managers are facing a double hit to their fees, as sovereign wealth funds withdraw billions to support their oil-dependent economies — and switch to a cheaper in-house investment approach.
- Oil Speculators Make ’Easy’ Bearish Call at 85-Year Supply High (BOEreport.com) Hedge funds placed the most bets on falling oil prices since July as rising piles of crude dashed hopes of a near-term recovery. Money managers’ short position in West Texas Intermediate crude jumped by 18 percent in the week ended Oct. 20, the largest surge since July 21, according to data from the Commodity Futures Trading Commission. That pulled their net-long position down by more than 16,000 contracts of futures and options.
- Ifo German business confidence higher than seen (Marketwatch) The mood among German business managers deteriorated by less than expected in October, with firms in the automotive sector unfazed by the recent emission scandal at car maker Volkswagen AG.
Overnight markets
- Overview: IG24 5Y 72.994/73.710 (+0.153), US 10yr note futures are up +0.07% at 128-16+, S&P 500 futures are down -0.07% at 2064.5, Crude oil futures are flat at 44.60, Gold futures are up +0.29% at $1166.2, DXY is up +0.36% at 96.954.
US Economic Data
- New home sales are forecast at 550K (-0.4% MoM) in September versus August 552K (5.7% MoM).
- Dallas Fed is forecast at -6.5 in October higher than September -9.5.
Canadian Economic Data
- Bloomberg Nanos Canadian Confidence Index will be released today at 10:00am.
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