– US tsys slightly lower, yields ~1.5bps higher with the curve steeper, muted reaction to Q2 GDP rev/initial claims. Not much follow thru to late aft tsy selloff after OPEC deal to cap production in Nov. Crude basically unch $46.95 Euro bonds in catchup mode, yields 2-4bps higher in Germany & UK, German 10Y yield -0.12% close to 11 week low. Bunds weighed by stronger Sep CPI, thou Commerzbank layoff news. Fed Lockhart (non voter) said Fed is closer to raising rates, supported consensus view to leave rates unch at FOMC meeting last week. GOCs unch after 8:30 US data, provi spds holding firm in the selloff yest, opening unch this morn, Ont looking to issue poss this morn given mkt tone.
–Stocks Jump as OPEC Splits Markets; Indian Assets Drop on Attack (Bloomberg) Stocks rallied in Asia and Europe after OPEC’s surprise announcement of a deal to cut crude output spurred a surge in oil late Wednesday. India’s assets fell after it attacked terrorist targets in Pakistan.
–In U-Turn, Saudis Choose Higher Prices Over Free Oil Markets (Bloomberg) Saudi Arabia has ended its flirtation with free oil markets. It took the kingdom’s new oil minister, Khalid Al-Falih, just six months to blink, ending the country’s two-year policy of pump-at-will. The decision at this week’s meeting of the Organization of Petroleum Exporting Countries in Algiers to cut production was necessitated by Saudi Arabia’s tattered finances.
–German inflation to hit 16-month high in September, state data suggest (Reuters) German inflation appears to have picked up more than expected in September, possibly reaching its highest level in 16 months, regional data suggested, an encouraging sign for the ECB that price pressures are reviving in Europe’s biggest economy.
–UK trade minister says Germany risks becoming ‘world’s greatest ATM’ after Brexit (Reuters) Germany risks becoming the world’s biggest cash machine after Brexit because it may end up paying for a failing European Union that is in danger of imploding, Britain’s trade minister said on Thursday.
–Fed’s Harker says December rate rise appropriate on current trajectory (Reuters) December’s U.S. Federal Reserve meeting would be an appropriate time to increase interest rates if the economy continues to move in the direction that it anticipates, Philadelphia Fed President Patrick Harker said on Thursday.
–Fed, BOJ add shine to risk-parity strategy (Reuters) The Federal Reserve and Bank of Japan’s actions last week have given a second wind to an alternative investment strategy that relies on cheap money and low market volatility to produce outsized returns.
– Overview: US 10yr note futures are down -0.1427% at 131-8, S&P 500 futures are down -0.17% at 2159.5, Crude oil futures are down -0.02% at $47.04, Gold futures are down -0.24% at $1320.5, DXY is up 0.2% at 95.618.
US Economic Data
-8:30 AM: GDP Annualized QoQ, 2Q T, 1.4%, est. 1.3% (prior 1.1%)
GDP Price Index, 2Q T, 2.3%, est. 2.3% (prior 2.3%)
Core PCE QoQ, 2Q T, 1.8%, est. 1.8% (prior 1.8%)
Personal Consumption, 2Q T, 4.3%, est. 4.4% (prior 4.4%)
Wholesale Inventories MoM, Aug P, -0.1%, est. 0.0% (prior 0.0%)
Initial Jobless Claims, Sep 24th, 254k, est. 260k (prior 252k, revised 251k)
Continuing Claims, Sep 17th, 2062k, est. 2129k (prior 2113k, revised 2108k)
-10:00 AM: Pending Home Sales MoM, Aug, est. 0.0% (prior 1.3%)
Pending Home Sales NSA YoY, Aug, est. 2.6% (prior -2.2%)
Canadian Economic Data
-7:00 AM: CFIB Business Barometer, Sep, 59.0 (prior 59.8)
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