Commentaires matinaux

Market Update

Tsys trading higher after very low volume o/n session (205k TY futures), equity futures giving up early gains (S&P -2.0, Nasdaq -2.75), US 10Y 1.75% (-1.5bps). Amazon down 6.5% pre-mkt on earnings miss and lower guidance. University of Michigan sentiment at 10:00 – the preliminary reading for October saw a drop in long-term inflation expectations to a record low 2.2%. Next week data picks up with focus on expected 25bp rate cut from the Fed on Wednesday. GOCs mixed curve slightly flatter with the 10Y 1.52%. BOC meeting next week with no change in rates or outlook expected, despite downgrading of Q3 growth forecasts after wholesale trade volumes fell 1.3% in August.

News headlines

Muted data and Brexit woes douse stocks rally (Reuters) Geopolitical tensions, muted economic data and mixed earnings stymied global stocks and weighed on crude oil prices on Friday with sterling hovering just above one week lows amid a new bout of Brexit anxiety.

Weak euro zone economy justifies ECB’s latest stimulus: Wunsch (Reuters) A recent string of dismal economic indicators justifies the European Central Bank’s move last month to provide more stimulus, and the bank can ease more if it needs to, Governing Council member Pierre Wunsch said. While ultra-loose policy raises valid concerns about financial stability, the move was still necessary and gives incoming ECB boss Christine Lagarde time to prepare for a broader review of the bank’s strategy, Wunsch, Belgium’s central bank governor, told Reuters in an interview.

U.S. Fed seen cutting rates next week and then hitting pause button (BNNBloomberg) Federal Reserve officials will signal they’re likely to take a break from cutting interest rates after lowering them again next week, according to a majority of economists surveyed by Bloomberg.In an Oct. 21-24 poll of 40 economists, 85 per cent said they anticipate the Federal Open Market Committee will reduce rates by a quarter percentage point when it wraps up a two-day meeting in Washington on Wednesday. That would lower the target range for the Fed’s benchmark rate to 1.5 per cent to 1.75 per cent.

Alberta counting on oil and pipeline surge to balance the books: budget (FP) Following spending cuts across the private sector, the Alberta government tabled a budget Thursday that makes deep cuts to the public sector, but that relies on a surge in oil and gas revenues to balance the books in four years. Alberta Finance Minister Travis Toews said his province has had “a spending problem” as he tabled a budget that included a 2.8 per cent cut to operating expenses over the next four years and a 7.7 per cent reduction in the size of the public service in the same period. Next year, the province expects to cut 764 jobs.

Canadian home prices, sales to resume climb after brief lull: CMHC (FP) The outlook is upbeat for housing in Canada next year with construction starts, sales and prices expected to rebound on the back of economic and demographic support, according to the country’s largest public mortgage provider. Housing starts will range between 194,000 and 204,300 next year, showing a return to form after two years of declines, Canada Mortgage and Housing Corp. said in its annual housing market outlook.

China says willing to increase ags, industrial goods imports from Brazil (Reuters) China is willing to increase its imports of agricultural and industrial goods from Brazil in order to enhance bilateral trade, Chinese Vice Premier Hu Chunhua said on Friday.

Johnson says of Brexit: we should be leaving on October 31 (Reuters) Prime Minister Boris Johnson said on Friday it was up to the European Union to decide a delay to Brexit but that Britain should be leaving on Oct. 31. “At the moment it is up to the EU, as you know, to decide whether or not they are going to give us an extension. As things stand we can leave on Oct. 31,” Johnson said. “We should be leaving on Oct. 31.”

Amazon profit declines for first time in two years; shares drop (BNNBloomberg) Amazon.com Inc.’s effort to get packages from warehouse to doorstep in a single day helped push the retail giant to its first year-over-year quarterly profit decline since early 2017.

Market Overview: US 10yr note futures are down -0.012% at 129-27, S&P 500 futures are up 0.02% at 3005, Crude oil futures are down -0.09% at $56.18, Gold futures are up 0.52% at $1512.5, DXY is up 0.03% at 97.665, CAD/USD is down -0.04% at 0.7654.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.635%	2 Year	1.586%
5 Year	1.545%	5 Year	1.585%
10 Year	1.519%	10 Year	1.766%
30 Year	1.631%	30 Year	2.262%

US Economic Data

10:00 AM	U. of Mich. Sentiment, Oct F  Survey: 9600.00%  Prior: 9600.00%
	U. of Mich. Current Conditions, Oct F  Survey: —  Prior: 11340.00%
	U. of Mich. Expectations, Oct F  Survey: —  Prior: 8480.00%
	U. of Mich. 1 Yr Inflation, Oct F  Survey: —  Prior: 2.50%
	U. of Mich. 5-10 Yr Inflation, Oct F  Survey: —  Prior: 2.20%
02:00 PM	Monthly Budget Statement, Sep  Survey: $83.0b  Prior: $119.1b

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

Tsys trading slightly higher, yields ~1bp lower across the curve, S&P futures +6, crude unch 55.90, light volume in TY futures (300k). ECB left rates unch as expected, Draghi final press conference coming up.  German bunds paring losses after both Manuf & Service PMIs missed est, 10Y bund falling below -0.40%. GOCs higher in line with tsys, 10Y 1.50%.

News headlines

Private sector job losses bode ill for German hopes of end-year rebound (FP) Employment in Germany’s private sector fell for the first time in six years in October, a survey showed on Thursday, suggesting that a third-quarter slowdown in Europe’s largest economy could stretch into the closing months of the year. Markit’s flash Purchasing Managers’ Index (PMI) survey showed that the slight fall in employment was mainly the result of job losses in the manufacturing sector, where staffing numbers fell to their lowest level in almost 10 years.

Mario Draghi’s final press conference before leaving the ECB – live (TheGuardian) The IHS Markit flash German manufacturing PMI inched up to 41.9 in October from September’s decade-worst 41.7, which is still a reading that shows the factory segment of the country’s economy in dire straits. Readings below 50 indicate contraction. Euro zone business activity stagnated in October as demand withered, according to a downbeat survey published on Thursday hours before European Central Bank President Mario Draghi makes his swansong appearance.  Germany’s economy is struggling badly, as Mario Draghi gives his final press conference as president of the European Central Bank. ECB leaves interest rates on hold-Fears mount over Germany-Eurozone economy looking sickly-Introduction: Draghi is leaving the ECB.

White House aide: Phase one U.S.-China trade deal targets intellectual property (Reuters) An initial pact on U.S-China trade will include much of a scrapped May deal’s agreement regarding intellectual property and will target enforcement mechanisms, White House trade adviser Peter Navarro said on Thursday, adding that he hopes the Chinese negotiate in “good faith.”

Futures rise as better earnings ease nerves (Reuters) U.S. stock index futures edged higher on Thursday, as solid results from Microsoft, Lam Research and Tesla lifted sentiment following lackluster reports from big bellwether companies in the previous session.

BOJ leaning toward holding fire on market calm, trade war truce (Reuters) The Bank of Japan is leaning toward keeping monetary policy steady next week as stable markets, a truce in U.S.-China trade talks and robust domestic demand give it room to save its dwindling ammunition to battle the next recession, sources said.

Market Overview: US 10yr note futures are up 0.048% at 129-30, S&P 500 futures are up 0.2% at 3011.75, Crude oil futures are down -0.23% at $55.84, Gold futures are down 0% at $1495.7, DXY is down 0% at 97.487, CAD/USD is down 0% at 0.765.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.623%	2 Year	1.57%
5 Year	1.53%	5 Year	1.57%
10 Year	1.508%	10 Year	1.749%
30 Year	1.612%	30 Year	2.236%

US Economic Data

08:30 AM	Durable Goods Orders, Sep P  Survey: -0.70%  Prior: 0.20%
	Durables Ex Transportation, Sep P  Survey: -0.20%  Prior: 0.50%
	Cap Goods Orders Nondef Ex Air, Sep P  Survey: -0.10%  Prior: -0.40%
	Cap Goods Ship Nondef Ex Air, Sep P  Survey: -0.20%  Prior: 0.30%
	Initial Jobless Claims, 43739  Survey: 215k  Prior: 214k
	Continuing Claims, 41183  Survey: 1678k  Prior: 1679k
09:45 AM	Bloomberg Consumer Comfort, 44105  Survey: —  Prior: 6350.00%
	Markit US Manufacturing PMI, Oct P  Survey: 5090.00%  Prior: 5110.00%
	Markit US Services PMI, Oct P  Survey: 5100.00%  Prior: 5090.00%
	Markit US Composite PMI, Oct P  Survey: —  Prior: 5100.00%
10:00 AM	New Home Sales, Sep  Survey: 702k  Prior: 713k
	New Home Sales MoM, Sep  Survey: -1.60%  Prior: 7.10%
11:00 AM	Kansas City Fed Manf. Activity, Oct  Survey: -300.00%  Prior: -200.00%
12:00 AM	Monthly Budget Statement, Sep  Survey: $83.0b  Prior: $119.1b

Canadian Economic Data

There is no Canadian economic data for today. p

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

Tsys trading higher, yields 1.5-2.5bps lower,10Y 1.735%, avg volume in TY futures (310k). US equity futures lower (S&P -6.0), weighed by earnings from Caterpillar and TI, and further Brexit uncertainty with PM Johnson ready to call an election after yest parliamentary loss on Brexit. Crude -1.0% 53.90, API data showed larger crude inventory build (4.45mln vs 2.23mln exp). GOCs higher in line with tsys, led by the 10Y (1.485% -3bps). BOC Business Outlook Survey noted ‘slight improvement’ in business sentiment and ‘healthy’ investment and hiring plans -overall fairly neutral and unlikely to sway the BOC either way.

News headlines

The cost of climate change: Trial to decide whether ExxonMobil was honest with investors (CNN) A trial in which energy giant ExxonMobil stands accused of misleading investors about the potential impact of climate change regulations on its operations started Tuesday. The New York attorney general brought the suit alleging the company used figures internally that were different from what they disclosed publicly when calculating the impact of laws, taxes and other economic aspects of climate change over the coming decades. The fraud cost investors as much $1.6 billion, the attorney general’s office alleges.

Boris Johnson wins Brexit deal vote but is thwarted on deadline (FT) Boris Johnson won the backing of MPs for his Brexit deal on Tuesday night in a landmark vote in the House of Commons, but a snap election was back on the agenda after MPs derailed his attempt to take Britain out of the EU on October 31. European Council president Donald Tusk proposed offering Mr Johnson a Brexit extension until January 31, after MPs voted against Mr Johnson’s plan to railroad his exit legislation through the Commons in time for the Halloween deadline.

Russia Agrees to Help Turkey Expand Buffer Zone in Syria (WSJ) Russia agreed to help Turkey drive out Kurdish militias from a “safe zone” in northeastern Syria, highlighting Moscow’s flourishing ties with a NATO member and a rebalance of power in war-torn Syria as U.S. troops leave. Turkish President Recep Tayyip Erdogan said he would suspend military action for nearly six days against Kurds who his government views as a terrorist threat to let them evacuate the area. During this period, Russian and Syrian security forces would push any remaining Kurdish fighters away from Turkey’s border.

CN Rail sees profits plateau in third quarter amid ‘softening economy’ (BNNBloomberg) Canada’s largest railroad operator cut its profit outlook for 2019 on Tuesday, saying a weaker economy has eroded rail demand. Canadian National Railway Co. lowered its expectations for adjusted earnings per share to the high single digits, down from predictions of low double-digit growth.

Rogers reports $593M third-quarter profit, cuts revenue forecast (BNNBloomberg) Rogers Communications Inc. cut its financial guidance as it reported a profit of $593 million in its latest quarter, compared with $594 million in the same quarter last year.

The cable and wireless company says it earned $1.14 per diluted share for the quarter ended Sept. 30, down from $1.15 per diluted share a year ago. Revenue totalled $3.75 billion, down from nearly $3.77 billion in the same quarter last year.

Market Overview: US 10yr note futures are up 0.229% at 130-04, S&P 500 futures are down -0.18% at 2989.25, Crude oil futures are down -0.95% at $53.96, Gold futures are up 0.61% at $1496.5, DXY is up 0.01% at 97.537, CAD/USD is down -0.03% at 0.764.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.6%	2 Year	1.552%
5 Year	1.503%	5 Year	1.553%
10 Year	1.489%	10 Year	1.731%
30 Year	1.601%	30 Year	2.223%

US Economic Data

07:00 AM	MBA Mortgage Applications, 43374  Survey: —  )Actual: -11.90% Prior: 0.50%
09:00 AM	FHFA House Price Index MoM, Aug  Survey: 0.30%  Prior: 0.40%
10:30 AM	DOE U.S. Crude Oil Inventories, 43374  Survey: 3000k  Prior: 9281k
	DOE U.S. Gasoline Inventories, 43374  Survey: -2238k  Prior: -2562k
12:00 AM	Monthly Budget Statement, Sep  Survey: $83.0b  Prior: $119.1b

Canadian Economic Data

08:30 AM

Wholesale Trade Sales MoM, Aug  Survey: 0.30%  Prior: 1.70%

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