US tsys trading higher, US 10Y 2.03 (-2.7bps) after weaker Sep Durable Goods (-1.2 vs -1.5, ex trans -0.4 vs 0.0). Tsys also supported by sharp gains in German 10Y bunds as bund fut hit new highs after ECB Nowotny comments on inflation. European equities lower by ~0.50% despite modest increase in China comp, commodities lower , crude below $44.00 on inventory build expected tomorrow. In Canada, GOCs are higher led by 10s again – another 2bps after yest 5 bps narrowing on strong CGB buying. Provis managed to hold bid tone in yest rally & with expec of supply building – Ont 25s trading up @ 94.5 yest aft, this morn 95/94.In corps CIBC reopening their 3Y dep notes @ ~111 over curve this morn, bid tone in bank paper continues – we are buyer of NVCC TD 2.982 20 we can pay 258 for 2mm.
- Congress and White House Reach Tentative Budget Deal (NYT) After five years of bitter clashes, Republican congressional leaders and President Obama on Monday night appeared to settle their last budget fight by reaching a tentative deal that would modestly increase spending over the next two years, cut some social programs, and raise the federal borrowing limit.
- Crude falls, extending two-week slide on refined oil glut worry (Reuters) Crude prices fell again on Monday, staying under pressure after two straight weeks of losses, on worries that the oversupply in oil products would swell from unseasonably warm weather and the waning maintenance cycle for U.S. refineries.
- U.K. Economy Expands Less Than Forecast as Production Cools (Bloomberg) U.K. economic growth cooled as manufacturing contracted for a third quarter and construction shrank the most since 2012, a sign that Britain may be falling prey to global headwinds.
- Ford Profit Misses Estimates as Taxes Delay Payoff From F-150 (Bloomberg) Ford Motor Co. posted third-quarter profits that fell short of analysts’ estimates as higher taxes reduced the payoff from its aluminum-bodied F-Series pickups.
- BP cuts costs as it braces for prolonged low oil price (FT) BP has become the latest big energy group to set out even deeper cuts to spending over the coming years, aiming to slash billions of dollars by 2017 under a plan that assumes a sustained slump in oil prices.
- Overview: IG24 5Y 73.964/74.679 (+0.698), US 10yr note futures are up +0.17% at 128-26, S&P 500 futures are down -0.27% at 2056.75, Crude oil futures are down -1.39% at 43.37$, Gold futures are down -0.03% at $1165.8, DXY is down -0.21% at 96.658.
US Economic Data
- Durable goods orders decreased in September by -1.2%, better than expectations of -1.5% MoM (-0.4% vs 0.0% Ex Trans.) versus revised August -3.0% MoM (-0.9% Ex Trans.).
- Nondefense capital goods ( New Orders) diminished by -0.3% in September, they were expected to increase 0.2% MoM (0.5% MoM vs 0.4% for Shipped) this is compared to -1.6% (NO) and -0.8% (S) for the previous month revised data.
- Case-Shiller house price index (20-City) is forecasted at 5.10% in August following a gain of 4.96% in July.
- Markit US Services PMI (Preliminary) is forecast at 55.5 for October, 0.4 point higher than previous month.
- Consumer confidence Index is expected at 103.0 in October compared to 103.0 for the previous month.
- Richmond Fed Manufacturing activity index is expected at -3 in October higher than September (-5).
Canadian Economic Data
- There is no major economic data 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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240