Commentaires

Market Update

US tsy yields slightly lower, curve 0.5bps flatter, US 10Y 2.24% (-1.1bps).  Crude above $51.00 (+1.1%) after OPEC said the latest production cuts are working. Core Euro bonds higher led by German bunds, euro currency lower after Angela Merkel’s win was clouded by strong showing of far right AFD party.  Quiet on the data front this week yet Fed speakers including Yellen tomorrow and Fischer on Thursday could shed some light on the Fes’s balance sheet unwind. Supply this week with the US Tsy auctioning $101bln in 2Y, 5Y & 2Y FRNs.  GOCs slightly lower in the short end, 10Y unch 2.11%, Poloz speech this Wednesday the main focus after Lane warned the central bank is paying close attention to short term rates and the dollar. Provis starting the week 0.5bps tighter , outlook is for more 10 & 30Y supply this week from Ont/QC after Alberta & BC long deals last week, with the GOC curve at the flattest levels in ~10 yrs.

News headlines 

Merkel’s Bloc Regroups After ‘Nightmare Victory’ in Germany (Bloomberg) Angela Merkel’s political bloc is starting to draw lessons from its electoral losses to the Alternative for Germany party as pressure mounts for the chancellor to win back voters lost to the populist right.

Shinzo Abe of Japan Calls Early Election, as a Rival Party Forms (NYTimes) Seizing on anxiety over tensions about North Korea and the opposition’s weakness, Prime Minister Shinzo Abe of Japan called Monday for an early election next month.

Bank of England asks banks to hold more capital on consumer loan risks (Reuters) British lenders need to hold around an extra 10 billion pounds ($13.5 billion) in capital to guard against increased risks from rapidly rising unsecured consumer lending, the Bank of England said on Monday.

TSX futures edge higher with oil prices (Reuters) Canada’s main stock index futures inched higher on Monday as oil prices rose after major producers said at a meeting that the global market was well on its way towards rebalancing.

Iron Ore Succumbs to Bear Market and May Extend Slump Into $50s (Bloomberg) Iron ore has slumped back into a bear market after posting the biggest weekly loss in 16 months amid concern that record demand in China may ease off as mills enact winter output cuts just as data from the top user signals that the economy may be cooling.

U.S. dairy takes aim at Canada’s supply management system in NAFTA talks (TheGlobeandMail) The first punches in what promises to be a bitter fight over Canada’s protected dairy industry are expected to be thrown during this week’s third round of North American Free Trade talks in Ottawa.

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

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys trading higher on ‘risk off’ tone following latest N. Korea threats, US 10Y 2.25% (-2.7bps), tsy futures near highs on heavier than avg volume (350k TY futures), Dec Eurodollars higher USD down for 2nd day after FOMC rally on Wed, crude unch @ 50.45, gold close to one-month lows after yest 1.6% decline. GOCs higher, outperforming tsys by 2-3bps after August CPI came in weaker 0.1% vs 0.2% exp, 1.4% y/y vs 1.5%. Active day in corps yest with $1bln Enbridge hybrids 60NC10Y hybrids, $350mln 3.4Y CWB deposit note @ 120.1 and $250mln CIXCN 10Y @ 179.7.   Enbridge hybrids way oversubscribed, broke $1 higher, 10bps tighter (315/305 pxd @ 325).

News headlines 

S&P Strips Hong Kong of AAA Rating After China Downgrade (Bloomberg) S&P Global Ratings cut Hong Kong’s credit rating a day after it downgraded China for the first time since 1999, a move that reflects the « strong institutional and political linkages » between the special administrative region and the mainland, the ratings firm said.

Euro-Area Economy Is on Track for Best Quarter Since 2015 (Bloomberg) The euro-area economy may have grown at the fastest pace in more than two years in the third quarter after an unexpected upturn in September.

May to Reboot Brexit Plan by Requesting Transition Period (Bloomberg) U.K. Prime Minister Theresa May will reboot her Brexit strategy on Friday by proposing a period of transition after the split with the European Union even if that means continuing to send money to Brussels and observing its rules until 2021.

Despite tough talk, Canada seen unlikely to walk away from NAFTA (Reuters) Despite Canada’s threats to walk away from NAFTA talks if necessary, its limited success in diversifying exports leaves the nation too reliant on U.S. markets to play hardball, government insiders and trade experts say.

Canada annual inflation rate increases to 1.4 percent in August (Reuters) Canada’s annual inflation rate in August increased to 1.4 percent, up from 1.2 percent in July, fueled by the transportation and shelter indexes, Statistics Canada said on Friday. Canada July retail sales up 0.4 percent on autos, food. Canadian retail sales increased by 0.4 percent in July from June to C$49.13 billion ($40.02 billion), as sales grew at motor vehicles and parts dealers, and food and beverage stores, Statistics Canada said on Friday.

Oil prices steady as OPEC ministers discuss supply cut pact (Reuters) Oil prices were steady on Friday, as investors waited to see whether major producers meeting in Vienna would back an extension to output cuts beyond March next year.

Overnight markets 

Overview: US 10yr note futures are up 0.137% at 125-26, S&P 500 futures are down -0.23% at 2495.25, Crude oil futures are down -0.45% at $50.32, Gold futures are up 0.18% at $1297.1, DXY is down -0.27% at 92.011, CAD/USD is down -0.16% at 0.8125.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

News headlines 

Dollar Rebounds as FOMC Meeting Makes Case for Profit Taking (Bloomberg) The Bloomberg Dollar Spot Index rose for the first time in three days, with higher Treasury yields lending support to the currency as investors’ focus turns to the Federal Reserve meeting that begins on Tuesday.

The Bank of Japan just showed how dull the country’s economy is right now (Business Insider) The Bank of Japan (BoJ) produced few surprises at its September monetary policy meeting, keeping interest rates, asset purchases and its assessment on the Japanese economy unchanged from July.

What Google Wants With HTC’s Smartphone Business (WSJ) Google’s $1.1 billion deal with HTC carries risks, but the internet giant needs more scale if it is to maintain its influence in the smartphone business. If nothing else, Google’s deal with HTC should settle the question of whether it is serious about making its own phones.

From Russia with fuel – North Korean ships may be undermining sanctions (Reuters) At least eight North Korean ships that left Russia with a cargo of fuel this year headed for their homeland despite declaring other destinations, a ploy that U.S. officials say is often used to undermine sanctions. Reuters has no evidence of wrongdoing by the vessels, whose movements were recorded in Reuters ship-tracking data. Changing a ship’s destination once underway is not forbidden and it is unclear whether any of the ships unloaded fuel in North Korea.

Overnight markets 

Overview: US 10yr note futures are up 0.112% at 125-25, S&P 500 futures are down -0.05% at 2504, Crude oil futures are down -0.99% at $50.19, Gold futures are down -1.58% at $1295.6, DXY is down -0.07% at 92.439, CAD/USD is up 0.27% at 0.8093.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230