Commentaires

Market Update

US tsys lower, yields 1-3 bps higher in bear steepening move, US 10Y 2.33% (+2bps), heavy volume in TY futures (565k) for a second day. Little reaction to upward revision in US Q2 GDP to 3.1% from 3.0%. Core Euro bonds lower, 10Y bund yield at two month high 0.50%, thou prices off the lows after German national CPI 0.1% as exp.  In Canada, GOCs mixed, 2s10s  5bps steeper since  Poloz speech yest, 2s rallying ~9bps  after Poloz said rate hikes were not on a preset course. Busy day in corps again yest with Alberta Powerline Ltd $1.108bln long deal, followed by the announcement that Metro was in talks to acquire Jean Coutu for $24.50 per share. This morning CIBC 3Y USD fixed & FRN, fixed @ ~70bps (GOCs + 67)

News headlines 

Trump Pitches Tax Plan as Historic Cut to Boost U.S. Hiring (Bloomberg) The 10-year Treasury yield rose to 2.348 percent, the highest in two months, as President Donald Trump promoted what he called “the largest tax cut” in U.S. history. The president and Republican leaders put on a show of unity when launching the plan, and stocks surged on hopes that the cuts, which include dropping the corporate rate to 20 percent, will become enshrined in legislation this year.

Loonie weakens as Bank of Canada’s surprise caution leaves bulls reeling (Financial Post) Bank of Canada Governor Stephen Poloz looked to temper recent optimism over the Canadian economy in a speech Wednesday, signalling a more open-ended monetary outlook that could see interest rates move “in either direction” amid fears over rising household debt levels.

Japan Election Turmoil Sets Up Two-Horse Race: Abe Versus Koike (Bloomberg) Japan’s main opposition party agreed to merge with a new group created by Tokyo Governor Yuriko Koike, setting her up as the main challenger to Prime Minister Shinzo Abe as he dissolved parliament ahead of an Oct. 22 election.

U.S. Second-Quarter Growth Revised Upward to 3.1% Annual Pace (Bloomberg) U.S. second-quarter growth was revised up slightly without altering the bigger picture of a consumer- driven economy that also got a healthy contribution from business spending during the period, Commerce Department data showed Thursday.

Toronto, London Among Riskiest Housing Bubble Cities, UBS Says (Bloomberg) Toronto and London are among the cities most at risk of a housing bubble as economic optimism and low borrowing costs push up property values in urban areas worldwide, according to UBS Group AG.

Metro in talks with Jean Coutu about possible merger (CBC) Grocery giant Metro says it is « engaged in exclusive discussions » regarding a possible merger with the Quebec-based Jean Coutu pharmacy chain. Metro announced Wednesday the two are discussing a deal in which it would acquire Jean Coutu at a price of $24.50 per share, to be paid 75 per cent in cash and 25 per cent in shares.

Overnight markets 

Overview: US 10yr note futures are down -0.112% at 125-10, S&P 500 futures are down -0.16% at 2500.5, Crude oil futures are up 0.88% at $52.6, Gold futures are up 0.02% at $1288, DXY is down -0.16% at 93.215, CAD/USD is down -0.11% at 0.8023. 

US Economic Data

Canadian Economic Data

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

Market Update

US tsy yields sharply lower on bear steepening move, heavy volume in TY1 futures (~700k) with the US 10Y 2.285 (+5bps), curve US$ higher, Euro stocks +0.50%, crude steady near $52. Core Euro bonds weaker, in line with tsys, 10Y bund yield seven-week high 0.46%. Weakness in tsys/EGBs attributed to delayed reaction to Yellen’s comments yest and progress on tax reform, also Saudi Arabia set to price $12.5bln jumbo USD deal this aft. GOCs lower in line with tsys, yields 2.5-5.5bps higher led by 10s @2.183 (+7.3bps) – a three year high. Poloz highly anticipated speech at noon. Provis quiet yest, spreads unch with supply expected thou issuers may take a pause given the move in yields and Poloz this aft.

News headlines 

 Atlanta Fed’s Bostic ‘comfortable’ with December hike if economy performs (Reuters) The Atlanta Federal Reserve Bank’s new president, Raphael Bostic, said on Tuesday that recent weak inflation probably means labor markets are still healing from the 2007 to 2009 financial crisis, and he would want “clear evidence” prices were firming before committing to another interest rate increase.

Fed’s Yellen says gradual hikes should continue, despite weak inflation (Reuters) The Federal Reserve needs to continue gradual rate hikes despite broad uncertainty about the path of inflation, Fed Chair Janet Yellen said on Tuesday in remarks that acknowledged the central bank’s struggles to forecast one of its key policy objectives.

U.S. slaps steep duties on Bombardier jets after Boeing complaint (Reuters) The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties on Bombardier Inc’s CSeries jets after rival Boeing Co accused Canada of unfairly subsidizing the aircraft, a move likely to strain trade relations between the neighbors.

Morneau Won’t Budge on Deficits Despite Canada’s Red-Hot Growth (Bloomberg) Canada’s hot economy won’t push Bill Morneau off his deficit spending plans, with the finance minister pledging continued cash for infrastructure and other programs to make the nation’s expansion sustainable in the long-term.

Dollar Gains on Yellen, U.S. Tax Plan; Bonds Slump: Markets Wrap (Bloomberg) The dollar extended gains and bonds fell after Federal Reserve Chair Janet Yellen boosted expectations for an interest-rate rise in December. Stocks advanced as President Donald Trump prepares to lay out his tax-cut plan.

Overnight markets 

Overview: US 10yr note futures are down -0.384% at 125-17, S&P 500 futures are up 0.19% at 2500.25, Crude oil futures are up 0.23% at $52, Gold futures are down -0.67% at $1293, DXY is up 0.47% at 93.399, CAD/USD is up 0.41% at 0.8068.

US Economic Data

Canadian Economic Data

There is no economic data scheduled 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

Market Update

Both US tsys & GOCs unch to slightly lower, US 10Y 2.22%, GOC 10Y 2.095%, Can/US 10Y +0.5bps @ 12bps. Light volume in TY futures overnite, Fed Kashkari (dove) said inflation remains lows, sees little sign of overheating.  Core European bonds lower , no data, just 2Y German supply, month end extension flows expected to be limited by small extension – 0.06Y for Euro Agg below avg.  Provi spds continuing to narrow yest despite a Jumbo Ontario long deal – $1.5bln longs @ 80.5 – now 80/79.  This morning Winnipeg Airports Authority in the mkt with a thirty year @ ~122 or  Onts + 42.  BCE in the mkt – reopened Oct 22s @ ~103, new 10Y Sep 29 27 @ ~ 153

News headlines 

Citi Says Get Ready for an Oil Squeeze (Bloomberg) Five countries in the group — Libya, Nigeria, Venezuela, Iran and Iraq — may already be pumping at their maximum capacity this year, Ed Morse, the bank’s global head of commodities research, said in an interview. Rather than a surge in output, there’s a risk of a market squeeze emerging as early as 2018, driven by those nations because of weaker investment in exploration and development, he said.

Dollar jumps to 1-month high vs. euro ahead of Yellen speech (MarketWatch) The dollar climbed against most other currencies on Tuesday, rising to a one-month high against the euro as traders continued to digest the German election and looked ahead to a speech on monetary policy from Federal Reserve Chairwoman Janet Yellen.

Alstom and Siemens rail deal runs into French political concerns (Reuters) Siemens is expected to opt for a deal with Alstom rather an alternative with Canada’s Bombardier (BBDb.TO)

Finance Minister ​Bill Morneau convinced tax reforms needed (CBC) Morneau argues the changes will not affect the vast majority of farmers as some have claimed. Nor will they prevent small businesses from using income sprinkling, distributing revenues in paycheques to family members, where those family members are actually working for the business.

Upcoming consumer confidence data could be key (CNBC) The consumer confidence index, published by the Conference Board, is due for release on Tuesday shortly after the opening bell. The consumer confidence index, published by the Conference Board, is due for release on Tuesday shortly after the opening bell.

Overnight markets 

Overview: US 10yr note futures are up 0.087% at 125-27, S&P 500 futures are down -0.09% at 2497.25, Crude oil futures are up 1.26% at $51.3, Gold futures are down -0.24% at $1294.4, DXY is up 0.43% at 92.568, CAD/USD is down -0.22% at 0.8121.

US Economic Data

Canadian Economic Data

There is no economic data scheduled 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