Commentaires
12/10/2017
Market Update
US tsys higher, yields 1.5-2bps lower led by the 7-10Y with the 10Y 2.33(-1.8bps), Euro equities lower, S&P futures -4 pts. Tsys saw heavy buying in Asia hours according to MNI with block trade in TY futs around the European open (~4.3k). Core Euro bonds higher, gilts lagging on news of deadlock in Brexit talks. Given that a hike by the Fed in Dec is ~80% priced in upcoming inflation data take on more importance, especially given the uncertainty reflected in the latest FOMC minutes over whether low inflation is transitory or not. GOCs higher in line with tsys, 10Y close to 2.10% resistance. Primary corp mkt busy with Enbridge hybrid pricing as well as Nissan 3Y @ 79. We were active in Nissan post issue.
News headlines
Inside the Fed’s September Meeting: The Annotated Minutes (Bloomberg) In September, the Federal Reserve maintained plans for a third interest rate increase in 2017; in October, it announced the start of its program to shrink its balance sheet.
Warsh Leads Yellen, Powell in Tight Race for Fed Chair (Bloomberg) Former Federal Reserve Governor Kevin Warsh has emerged as the leading candidate to run the central bank next year, jumping ahead of current Chair Janet Yellen, according to a Bloomberg survey of economists Oct. 6–11. Fed Governor Jerome Powell—until now seen as a long-shot—vaulted into a tie for second with Yellen behind Warsh in the poll.
Pound May Enter Bumpy Ride Into Year-End on BOE, Brexit: Chart (Bloomberg) Currency traders are getting more concerned about the political fate of Prime Minister Theresa May and the impasse in Brexit negotiations. Demand for options that are out of the money relative to those in the money has risen to the highest in two months, suggesting that investors anticipate wider swings in sterling. The Bank of England reviews its benchmark bank rate on Nov. 2, adding to the clamor for hedges.
Catalans Face a Deadline Dilemma (Bloomberg) Prime Minister Mariano Rajoy gave his Catalan antagonist Carles Puigdemont five days to clarify whether he has declared independence from Spain or not as the country prepared for its national holiday on Thursday.
Trump Rethinks State-Local Tax Issue Over Middle-Class Concerns (Bloomberg) Months after the White House proposed ending a tax break for people in high-tax states, President Donald Trump grew angry when he learned that the change would hurt some middle-income taxpayers, according to two people familiar with his thinking.
Canada’s Metro to sell majority stake in Couche Tard for C$1.5 bln (Reuters) Canada’s Metro Inc said on Wednesday it would sell a major portion of its stake in Alimentation Couche Tard Inc to fund its C$4.5 billion acquisition of pharmacy chain Jean Coutu Group.
Employee-discount tax change removed as feds face uproar (Toronto Star) The federal government appears to be doing away with a controversial tax policy interpretation that would have seen employees taxed for discounts they get at work.
BlackBerry signs license deal with Florida’s BLU, ends patent dispute (Reuters) BlackBerry Ltd (BB.TO) said on Thursday it signed a new license agreement with BLU Products Inc, a Florida-based maker of low-end Android phones, that would end patent disputes between the two companies.
Overnight markets
Overview: US 10yr note futures are up 0.075% at 125-11, S&P 500 futures are down -0.15% at 2549.25, Crude oil futures are down -1.38% at $50.59, Gold futures are up 0.65% at $1297.3, DXY is up 0.08% at 93.09, CAD/USD is up 0.06% at 0.8021.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.566% | 2 Year | 1.509% |
| 5 Year | 1.77% | 5 Year | 1.941% |
| 10 Year | 2.105% | 10 Year | 2.334% |
| 30 Year | 2.455% | 30 Year | 2.871% |
US Economic Data
| 8:30 AM | PPI Final Demand MoM, Sep 0.4% est 0.4% (0.2% prior) |
| PPI Ex Food and Energy MoM, Sep 0.4% est 0.2% (0.1% prior) | |
| PPI Ex Food, Energy, Trade MoM, Sep 0.2% est 0.2% (0.2% prior) | |
| PPI Final Demand YoY, Sep 2.6% est 2.6% (2.4%prior) | |
| PPI Ex Food and Energy YoY, Sep 2.2% est 2.0% (2.0% prior) | |
| PPI Ex Food, Energy, Trade YoY, Sep 2.1% (1.9% prior) | |
| Initial Jobless Claims, Oct 7th 243k est 250k (260k prior) | |
| Continuing Claims, Sep 30th 1889k est 1930k (1938k prior) | |
| 9:45 AM | Bloomberg Consumer Comfort, Oct 8th (49.9 prior) |
| 10/12-10/20 | Monthly Budget Statement, Sep est 6.0b (33.4b prior) |
Canadian Economic Data
| 8:30 AM | New Housing Price Index MoM, Aug 0.1% est 0.2% (0.4% prior) |
| New Housing Price Index YoY, Aug 3.8% (4.8% prior) | |
| Teranet/National Bank HPI MoM, Sep -0.8% (0.6% prior) | |
| Teranet/National Bank HPI YoY, Sep 11.4% (13.1% prior) | |
| Teranet/National Bank HP Index, Sep 220.33 (222.03 prior) |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
11/10/2017
Market Update
US tsys higher, 10Y 2.35% (-1bp) ahead of thin calendar with JOLTs job opening data and FOMC minutes from Sep meeting at 2:00PM. The US tsy auctions $24bln in 3Y and $20bln in 10Y notes as well with the latter ~17bps higher in yield than at the last 10Y auction on Sep 12th. Core Euro bonds lower, 10Y bund/tsy spd 3bps tighter as geopolitical risks from Catalonia subside, rally in EU peripherals. GOCs unch, 10Y 2.12%, volatility has collapsed over the last month with the 10Y benchmark in a ~$0.30 corridor. Provincials unch , 10Y supply rumoured.
News headlines
Madrid Keeps Pressure on as Catalans Blink on Independence (Bloomberg) Spain maintained its hard line against Catalonia’s secession campaign after the regional leader in Barcelona stopped short of the declaration of independence his allies wanted.
Trump Says He’ll Adjust His Tax Plan in the Next Few Weeks (Bloomberg) President Donald Trump said Tuesday he plans to make changes to his tax plan within the next few weeks, while dismissing concerns that his public spat with Senator Bob Corker would scuttle an overhaul.
Japan Shares Rise With Nikkei 225 Closing at Highest Since 1996 (Bloomberg) Japanese shares advanced, with the Nikkei 225 Stock Average closing at its highest since December 1996, bolstered by companies in industries ranging from technology to retail.
Sears Canada going out of business, laying off 12,000 (Toronto Star) Once a titan of Canadian retail, Sears Canada announced Tuesday that it is going out of business, putting 12,000 people out of work and shuttering all operations nationwide.
Canada Housing Starts Posted Rare Drop in September (The Wall Street Journal) Canadian housing starts fell in September after eight straight monthly gains, although the level remains elevated and suggest residential construction lifted economic growth in the third quarter.
Canada’s indebted households vulnerable to shock: BOC’s Wilkins (Reuters) Canada’s household sector is vulnerable to any kind of negative shock due to its high level of indebtedness, but stress tests show Canada’s banking system should weather a drop in house prices, Bank of Canada Senior Deputy Governor Carolyn Wilkins said on Tuesday.
Overnight markets
Overview: US 10yr note futures are down -0.037% at 125-07, S&P 500 futures are down -0.13% at 2545.25, Crude oil futures are up 0.1% at $50.97, Gold futures are down -0.08% at $1292.8, DXY is down -0.13% at 93.17, CAD/USD is down -0.04% at 0.7993
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.553% | 2 Year | 1.513% |
| 5 Year | 1.777% | 5 Year | 1.95% |
| 10 Year | 2.121% | 10 Year | 2.346% |
| 30 Year | 2.483% | 30 Year | 2.881% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Oct 6th -2.1% (-0.4% prior) |
| 10:00 AM | JOLTS Job Opening, Aug est 6125 (6170 prior) |
| 14:00 PM | FOMC Meeting Minutes, Sep 20th |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
10/10/2017
Market Update
US tsys slightly higher, 10Y 2.345 (-1.5bps) on avg volume in TY futures (270k). a large5Y tsy/German block trade helped underpin tsys in Europe. Gilts lower, underperforming bunds on weak 20Y gilt reopening and better than exp Sep industrial production. Tsy supply a factor this week with $66bln in 3,10 & 30Y auctions. Data calendar highlighted by Sep PPI, CPI later this week with the latter expected to reflect the post hurricane surge in gas prices. In Canada, GOCs higher in line with tsys, little reaction to stronger than exp Sep Housing Starts.
News headlines
Catalans Face a Day of Reckoning Over Independence (Bloomberg) The Catalan government’s determination to break from Spain faces its moment of truth, as the regional parliament meets to consider a declaration of independence that risks an ironclad backlash from Madrid, the threat of economic meltdown and international isolation.
Old Grudges Blow Up in the Turkey-U.S. Feud (Bloomberg) With its arrest warrants and visa freezes, the Turkey-U.S. standoff looks more like a flashpoint between enemies than a difference of views among friends.
Politics in Focus as Spanish Stocks, Dollar Drop: Markets Wrap (Bloomberg) Politics remained the dominant theme in the markets on Tuesday as Spanish stocks declined and the euro rose before a pivotal meeting of Catalan’s regional parliament. The dollar weakened on concerns over U.S. tax reform and sterling rose as U.K. Prime Minister Theresa May won support for her Brexit stance.
U.K. Shows ‘Mixed Picture’ as Output Rises, Trade Deficit Widens (Bloomberg) A picture of an economy struggling to gain momentum emerged in U.K. figures published Tuesday.
Oil Companies Wade Back Into Gulf of Mexico as Nate Fizzles (Bloomberg) Oil companies were heading back into the Gulf of Mexico and working to restore operations after Hurricane Nate fizzled out over the U.S. South on Sunday.
Canada gains jobs for 10th month in a row with boost in full-time work (Financial Post) surge in full-time work fuelled a 10th-straight month of net job gains to match the economy’s longest monthly streak since the financial crisis nine years ago.
U.S. Lost 33,000 Jobs in September; Unemployment Rate Dips to 4.2% (NY Times) Staggering from the impact of hurricanes that walloped Texas, Florida and neighboring states, the economy lost 33,000 jobs in September, the first monthly decline in employment in seven years, the government reported on Friday.
Overnight markets
Overview: US 10yr note futures are up 0.05% at 125-05, S&P 500 futures are up 0.13% at 2547, Crude oil futures are up 1.29% at $50.22, Gold futures are up 0.72% at $1294.2, DXY is down -0.29% at 93.402, CAD/USD is down -0.36% at 0.7996.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.549% | 2 Year | 1.504% |
| 5 Year | 1.772% | 5 Year | 1.951% |
| 10 Year | 2.118% | 10 Year | 2.354% |
| 30 Year | 2.486% | 30 Year | 2.892% |
US Economic Data
| 6:00 AM | NFIB Small Business Optimism, Sep 103.0 est 105.0 (105.3 prior) |
Canadian Economic Data
| 8:15 AM | Housing Starts, Sep est 212.0k (223.2k prior) |
| 8h30 AM | Building Permits MoM, Aug, est -1.0% (-3.5% prior) |
| 10:00 AM | Bloomberg Nanos Confidence, Oct 6th (58.3 prior) |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230