Commentaires

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

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