Commentaires matinaux

Market Update

US tsys trading slightly higher led by the long end, low volume in TY futures (215k), US equity futures unch,  quiet conditions before FOMC decision this aft. A third rate cut is priced in for the Fed today, what will be in focus is outlook for additional ‘adjustments’.  Tsy quarterly refunding statement & Q3 GDP at 8:30.   Tsy refunding not expected to see changes in auction sizes, potential issuance linked to repo market, a ‘SOFR’ FRN and a 20Y tsy fixed issue.  Core EGBs outperforming, 10Y gilt 2.5bps lower – the UK will hold a general election Dec 12th  in another referendum on Brexit.  GOCs higher, in line with tsys, 10Y 1.58%. BOC at 10:00am expected to leave rates unch at 1.75%, in view of last week’s upbeat BOC survey, inflation tracking at BOC target.

News headlines

Stocks Drift as Traders Await Fed Decision, Powell: Markets Wrap (Bloomberg) U.S. equity-index futures drifted alongside stocks in Europe on Wednesday while Asian shares were mixed as markets largely entered a holding pattern in the countdown to the Federal Reserve’s policy decision. Treasuries ticked higher and the dollar slipped.

TSX futures slip ahead of Fed, BoC rate decisions (Reuters) Canada’s main stock index futures inched lower on Wednesday, ahead of policy decisions from the U.S. Federal Reserve and the Bank of Canada.

Outlier status leaves Bank of Canada atop the interest rate heap (BNN) The Bank of Canada is widely expected to hold interest rates steady for an eighth-straight meeting on Wednesday, probably leaving the country with the highest policy rate among the world’s major economies.

Fed prepares to pause after third rate cut (BNN) Jerome Powell may be getting ready to pause this year’s monetary easing campaign.

With balance sheet in background, markets focus on Fed’s rate decision (Reuters) When Federal Reserve officials conclude their two-day policy meeting on Wednesday, they may at last have succeeded in divorcing the actions they take in managing the U.S. central bank’s massive balance sheet from interest rate decisions.

U.S. economy likely lost further ground in third quarter (Reuters) The U.S. economy likely slowed further in the third quarter, held back by a moderation in consumer spending and declining business investment, which could spur the Federal Reserve to cut interest rates again to keep the expansion on course.

In U.S.-China talks, Beijing’s refusal to spell out farm buys is big sticking point (Reuters) U.S. President Donald Trump’s demand that Beijing commit to big purchases of American farm products has become a major sticking point in talks to end the Sino-U.S. trade war, according to several people briefed on the negotiations.

France outshines Germany as euro zone economic gloom deepens (Reuters) Strong domestic stimulus is helping France shrug off a global slowdown even as export-dependent Germany heads closer to a recession, starkly divergent data on the euro zone’s two leading economies showed on Wednesday.

Market Overview: US 10yr note futures are up 0.048% at 129-11, S&P 500 futures are up 0.03% at 3036.75, Crude oil futures are up 0.11% at $55.6, Gold futures are up 0.4% at $1496.6, DXY is down -0.04% at 97.652, CAD/USD is down -0.04% at 0.7644.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.697%	2 Year	1.634%
5 Year	1.611%	5 Year	1.65%
10 Year	1.588%	10 Year	1.823%
30 Year	1.729%	30 Year	2.316%

US Economic Data

07:00 AM	MBA Mortgage Applications, Oct 25  Survey: —  Actual: 0.60% Prior: -11.90%
08:15 AM	ADP Employment Change, Oct  Survey: 110k  Actual: 125k Prior: 135k Revised 93k
08:30 AM	GDP Annualized QoQ, 3Q A  Survey: 1.60%  Prior: 2.00%
	Personal Consumption, 3Q A  Survey: 2.60%  Prior: 4.60%
	GDP Price Index, 3Q A  Survey: 1.90%  Prior: 2.40%
	Core PCE QoQ, 3Q A  Survey: 2.20%  Prior: 1.90%
02:00 PM	FOMC Rate Decision (Upper Bound), Oct 30  Survey: 1.75%  Prior: 2.00%
	FOMC Rate Decision (Lower Bound), Oct 30  Survey: 1.50%  Prior: 1.75%

Canadian Economic Data

10:00 AM

Bank of Canada Rate Decision, Oct 30 Survey: 1.75%  Prior: 1.75%

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

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

Market Update

US tsys higher, yields 1bp lower across the curve on avg volume, 10Y 1.833%, S&P futures little changed (-2.5) after reaching record high yest. Second tier data in the US included Consumer Sentiment & Pending Home Sales before FOMC tomorrow. According to the South China Morning Post Trump and Xi will meet in Chile Nov 17th to sign interim trade deal. CAD continuing to creep higher, 1.3046 before BOC & August GDP.  GOCs higher & tighter vs tsys led by 10s, this coming after yesterday’s $0.70 underperformance in CGBs vs TY futures. We could see some follow thru to this morning’s short covering in Can/US going into BOC/GDP considering the steady cheapening since March.

News headlines

U.S. Futures Dip, Europe Stocks Drop as Bonds Rise: Markets Wrap (Bloomberg) U.S. index futures drifted lower and European stocks dropped as investors weighed some of the season’s biggest corporate earnings and the possibility of a Federal Reserve rate cut this week. Treasuries edged higher and most euro-area bonds rose.

TSX futures fall as crude prices slip (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Tuesday as oil prices dropped on expectations of rising U.S. crude inventories.

Bank of Canada seen on hold, inviting ‘hot-money’ flows (Reuters) The Bank of Canada is likely to keep interest rates steady on Wednesday in its first policy announcement since the federal election, despite signs that investors seeking higher-yielding currencies are shifting more money into Canadian dollars.

Three-peat? Fed copies 1990s playbook in bid to avert a downturn (Reuters) In the midst of what became a golden decade for the U.S. Federal Reserve, central bankers twice in the 1990s cut interest rates in short bursts that managed to help the U.S. economy continue growing despite slowing investment and weak growth overseas.

U.S.-China tensions spur progress on giant Asia trade pact (Reuters) Tensions between the United States and China have given new impetus to a China-backed trade pact and there is a chance of major progress, if not final agreement, when Southeast Asian leaders meet in Bangkok this week, analysts say.

China to ease foreign investments curbs, won’t force tech transfers: vice minister (Reuters) China will eliminate all restrictions on foreign investments not included in its self-styled “negative lists”, a vice commerce minister said on Tuesday, signaling upcoming directives.

Ukraine PM wants new three-year deal with IMF (Reuters) Ukrainian Prime Minister Oleksiy Honcharuk said on Tuesday his government wanted to sign a new three-year loan agreement with the International Monetary Fund and he expected to reach an agreement with its officials on the content in the coming weeks.

Largest China Convertible Bond Draws $1.1 Trillion in Bids (Bloomberg) Investors seized the chance to take part in China’s largest convertible bond sale, showing just how coveted the equity-like securities have become.

Market Overview: US 10yr note futures are up 0.06% at 129-08, S&P 500 futures are down -0.11% at 3033, Crude oil futures are down -1.22% at $55.13, Gold futures are down -0.5% at $1488.3, DXY is up 0.09% at 97.848, CAD/USD is up 0.01% at 0.7659.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.709%	2 Year	1.636%
5 Year	1.632%	5 Year	1.659%
10 Year	1.612%	10 Year	1.837%
30 Year	1.749%	30 Year	2.329%

US Economic Data

09:00 AM	S&P CoreLogic CS 20-City MoM SA, Aug  Survey: -0.10%  Prior: 0.02%
	S&P CoreLogic CS 20-City YoY NSA, Aug  Survey: 2.10%  Prior: 2.00%
	S&P CoreLogic CS 20-City NSA Index, Aug  Survey: —  Prior: 218.00
10:00 AM	Conf. Board Consumer Confidence, Oct  Survey: 128.0  Prior: 125.1
	Pending Home Sales MoM, Sep  Survey: 0.90%  Prior: 1.60%
	Pending Home Sales NSA YoY, Sep  Survey: 3.60%  Prior: 1.10%

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

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

Market Update

US tsys trading lower on avg volume (382k), 10Y 1.84% (+5bps), tsy curve 1bp steeper 2s10s @19bps. Big data week highlighted by FOMC (25bp cut expected) & Payrolls. Equity futures continuing higher (S&P +12, Nasdaq +39) with the S&P500 poised to hit a record high  – 35% of S&P firms reporting earnings this week, so far 80% have beaten on EPS and 65% on sales (MNI), with only 32% mentioning the word ‘recession’ in their earnings call according to CNBC.  Core EGBs lower, pressured after Donald Tusk, president of the European Council, announced a 3 month extension to Brexit deadline until Jan 31st. In Canada, GOCs weaker in line with tsys, 10Y highest since Sep 16th.  BOC decision Wednesday – no change in rates exp, risk is that outlook actually improves since Sep meeting considering improved data flow and progress on trade , USMCA.

News headlines

U.S. Futures Rise as Fed Meeting Nears; Bonds Fall: Markets Wrap (Bloomberg) U.S. index futures climbed while stocks in Europe struggled for traction at the start of a week in which big corporate earnings continue to roll in and the Federal Reserve is expected to cut interest rates. Treasuries dropped, pushing the 10-year yield to a six-week high.

TSX futures little changed as trade hopes offset weaker oil (Reuters) Futures for Canada’s main stock index barely moved on Monday, as a fall in oil prices was offset by increased expectations of a Sino-U.S. trade deal.

Hong Kong enters recession as protests again erupt in flames (Reuters) Hong Kong has fallen into recession, hit by five months of anti-government protests that erupted in flames at the weekend, and is unlikely to achieve any growth this year, the city’s Financial Secretary said.

IMF urges Lebanon reforms, protesters keep up pressure (Reuters) The International Monetary Fund said on Monday Lebanon should urgently implement reforms to restore confidence and economic stability, as protesters kept up the pressure on politicians they accuse of corruption by setting up new road blocks.

Italian Bonds Stumble as Cracks Start Showing in Political Calm (Bloomberg) Bond buyers just got a reminder that owning Italian debt isn’t quite the breeze it felt like in recent months.

Loonie erodes U.S. dollar’s high-yielding status as BoC, Fed decisions loom (BNN) When the Canadian and U.S. central banks announce policy decisions on Oct. 30, traders are betting that the divergent decisions will allow the loonie to blunt the U.S. dollar’s status as the highest yielding Group-of-10 currency.

France orders EDF to tackle nuclear project failings (Reuters) EDF must present an action plan within a month on how to tackle skills shortages and other problems that have caused delays at key nuclear projects and damaged the reputation of the industry, French Finance Minister Bruno Le Maire said on Monday.

Market Overview: US 10yr note futures are down -0.193% at 129-09, S&P 500 futures are up 0.29% at 3029, Crude oil futures are down -0.32% at $56.48, Gold futures are down -0.04% at $1504.7, DXY is down -0.12% at 97.718, CAD/USD is up 0.04% at 0.7656.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.679%	2 Year	1.642%
5 Year	1.598%	5 Year	1.654%
10 Year	1.568%	10 Year	1.831%
30 Year	1.701%	30 Year	2.319%

US Economic Data

08:30 AM	Chicago Fed Nat Activity Index, Sep  Survey: 0.00 Actual: -0.45 Prior: 0.10
	Wholesale Inventories MoM, Sep P  Survey: 0.30% Actual: -0.30% Prior: 0.20%
10:30 AM	Dallas Fed Manf. Activity, Oct  Survey: 1.0  Prior: 1.5

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Oct 25  Survey: —  Prior: 57.5

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

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