Market Update
US tsys higher, yields 1bp lower across the curve on avg volume, 10Y 1.833%, S&P futures little changed (-2.5) after reaching record high yest. Second tier data in the US included Consumer Sentiment & Pending Home Sales before FOMC tomorrow. According to the South China Morning Post Trump and Xi will meet in Chile Nov 17th to sign interim trade deal. CAD continuing to creep higher, 1.3046 before BOC & August GDP. GOCs higher & tighter vs tsys led by 10s, this coming after yesterday’s $0.70 underperformance in CGBs vs TY futures. We could see some follow thru to this morning’s short covering in Can/US going into BOC/GDP considering the steady cheapening since March.
News headlines
U.S. Futures Dip, Europe Stocks Drop as Bonds Rise: Markets Wrap (Bloomberg) U.S. index futures drifted lower and European stocks dropped as investors weighed some of the season’s biggest corporate earnings and the possibility of a Federal Reserve rate cut this week. Treasuries edged higher and most euro-area bonds rose.
TSX futures fall as crude prices slip (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Tuesday as oil prices dropped on expectations of rising U.S. crude inventories.
Bank of Canada seen on hold, inviting ‘hot-money’ flows (Reuters) The Bank of Canada is likely to keep interest rates steady on Wednesday in its first policy announcement since the federal election, despite signs that investors seeking higher-yielding currencies are shifting more money into Canadian dollars.
Three-peat? Fed copies 1990s playbook in bid to avert a downturn (Reuters) In the midst of what became a golden decade for the U.S. Federal Reserve, central bankers twice in the 1990s cut interest rates in short bursts that managed to help the U.S. economy continue growing despite slowing investment and weak growth overseas.
U.S.-China tensions spur progress on giant Asia trade pact (Reuters) Tensions between the United States and China have given new impetus to a China-backed trade pact and there is a chance of major progress, if not final agreement, when Southeast Asian leaders meet in Bangkok this week, analysts say.
China to ease foreign investments curbs, won’t force tech transfers: vice minister (Reuters) China will eliminate all restrictions on foreign investments not included in its self-styled “negative lists”, a vice commerce minister said on Tuesday, signaling upcoming directives.
Ukraine PM wants new three-year deal with IMF (Reuters) Ukrainian Prime Minister Oleksiy Honcharuk said on Tuesday his government wanted to sign a new three-year loan agreement with the International Monetary Fund and he expected to reach an agreement with its officials on the content in the coming weeks.
Largest China Convertible Bond Draws $1.1 Trillion in Bids (Bloomberg) Investors seized the chance to take part in China’s largest convertible bond sale, showing just how coveted the equity-like securities have become.
Market Overview: US 10yr note futures are up 0.06% at 129-08, S&P 500 futures are down -0.11% at 3033, Crude oil futures are down -1.22% at $55.13, Gold futures are down -0.5% at $1488.3, DXY is up 0.09% at 97.848, CAD/USD is up 0.01% at 0.7659.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.709% | 2 Year | 1.636% |
| 5 Year | 1.632% | 5 Year | 1.659% |
| 10 Year | 1.612% | 10 Year | 1.837% |
| 30 Year | 1.749% | 30 Year | 2.329% |
US Economic Data
| 09:00 AM | S&P CoreLogic CS 20-City MoM SA, Aug Survey: -0.10% Prior: 0.02% |
| S&P CoreLogic CS 20-City YoY NSA, Aug Survey: 2.10% Prior: 2.00% | |
| S&P CoreLogic CS 20-City NSA Index, Aug Survey: — Prior: 218.00 | |
| 10:00 AM | Conf. Board Consumer Confidence, Oct Survey: 128.0 Prior: 125.1 |
| Pending Home Sales MoM, Sep Survey: 0.90% Prior: 1.60% | |
| Pending Home Sales NSA YoY, Sep Survey: 3.60% Prior: 1.10% |
Canadian Economic Data
There is no Canadian economic data 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, Émile Bordeleau
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