Market Update
– US tsys opening higher, the 10Y yield lower for a sixth day 1.56% (-2.3bps) as early risk on tone in Asia quickly evaporated as European trading got underway. European stocks lower led by financials & energy – Deutsche Bank down another 2.9% – the bank has denied asking the German govt for assistance. Commerzbank down 2.7% on reports the bank plans to eliminate 9,000 jobs and suspend dividends. Crude ~2.5% lower on doubts oil ministers will be able to agree to a freeze at the Algiers meeting. Core Euro bonds higher, curved flatter on lower stocks. In the US 5 & & yr note auctions today and Wed also supporting the flattenning trade. In Canada, GOCs higher outperforming tsys out to 5yrs, with longs lagging 10s30s ~1.5bps steepr at 67.5. Provis wider for a second day on risk off, Ont 26s 85.5/ after reaching new lows ~83.5 last Wed, rumouts of supply also weighing on the mkt.
News headlines
–European Stocks Drop, Oil Slides as Clinton Rally Is Short Lived (Bloomberg) European stocks fell for a third day as losses among carmakers, energy producers and banks damped a global rally fueled by Hillary Clinton’s performance in the first American presidential debate.
–Oil prices slip as hopes for a deal in Algiers fade (Reuters) Crude futures fell further on Tuesday as optimism faded for an output-limiting deal during an oil producer meeting in Algeria that so far has failed to yield any agreement to curb one of the worst supply gluts in history.
–France unlikely to achieve 2017 deficit target: fiscal watchdog (Reuters) France is unlikely to meet its 2017 budget deficit target, the country’s independent fiscal watchdog said on Tuesday, casting doubt on the government’s plan to cut the shortfall to less than 3 percent of output.
–Deutsche Bank Returns to Haunt Merkel in an Election Year (Bloomberg) In April 2008, as the global financial crisis was brewing, Angela Merkel hosted a 60th birthday reception in her Berlin chancellery for Deutsche Bank’s then-chief executive Josef Ackermann. Eight years later, her government is doing its best to keep Germany’s biggest bank at arm’s length.
–WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call (Reuters) The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.
–BOJ Nakaso: Structural reforms need to accompany ultra-easy policy (Reuters) The Bank of Japan has taken steps to push down real interest rates but structural reforms are also needed to boost the economy’s growth potential, the central bank’s deputy governor Hiroshi Nakaso said on Tuesday.
–Rogers, Shaw to shutter video streaming service Shomi in November after less than two years (FinancialPost) Shomi, a made-in-Canada answer to Netflix, is bowing out of the growing video streaming market. The less than two-year-old service, a joint venture between Rogers Communications Inc. and Shaw Communications Inc., will shut down on Nov. 30, the two companies announced Monday.
Overnight markets
– Overview: US 10yr note futures are up 0.2261% at 131-20, S&P 500 futures are up 0.04% at 2140.5, Crude oil futures are down -2.59% at $44.74, Gold futures are down -0.63% at $1335.6, DXY is up 0.31% at 95.595.
US Economic Data
– 9:45 AM: Markit US Services PMI, Sep P, est. 51.2 (prior 51.0)
Markit US Composite PMI, Sep P, (prior 51.5)
– 10:00 AM: Consumer Confidence Index, Sep, est. 99.0 (prior 101.1)
Richmond Fed Manufacturing Index, Sep, est. -2 (prior -11)
Canadian Economic Data
-There is major economic data release 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, David Leclair-Legault
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230