Commentaires matinaux

Market Update

US tsys lower, yields 2-4 bps higher , 10Y 1.78 (+2.5bps), S&P futures +9.5 at the highs of the o/n session.  UK gilts lower on as UK PM Johnson forced to ask Parliament for extension on Brexit vote. US data calendar light this week focus on Sep Durable Goods Thurs & tsy supply ($113bln in 2Y,5Y & 7Y). GOCs lower in line with tsys, 10Y yield at the upper end of three month range 1.56%, 10s30s flattest since Dec  @10bps.  Election day today with latest IPSOS showing conservative slight lead over liberals (33 to 31), minority govt likely.  BOC Business Outlook Survey and August Retail Sales tomorrow – the former expected to remain close to the 0.2 level seen in Q2

News headlines

U.S. Equity Futures Rise With Stocks as Bonds Sink: Markets Wrap (Bloomberg) U.S. equity-index futures advanced alongside European and Asian shares as investors awaited fresh developments on foreign trade and this week’s slew of results from major companies. Bonds dropped.

TSX futures rise on Sino-U.S. trade optimism (Reuters) Canada’s main stock index futures rose on Monday on hopes of a breakthrough in trade talks between China and the United States following positive comments from the two sides.

Oil Extends Decline as Concerns Over Global Economy Persist (Bloomberg) Oil fell again after a weekly loss amid ongoing concern that a fragile economic outlook will continue to weigh on fuel demand.

China seeks $2.4 billion in sanctions against U.S. in Obama-era case: WTO (Reuters) China is seeking $2.4 billion in retaliatory sanctions against the United States for non-compliance with a WTO ruling in a tariffs case dating to the Obama era, a document published on Monday showed.

Currency risks? U.S. corporates yawn (Reuters) Muted gyrations in foreign exchange markets has turned companies complacent about hedging currency risks, and as the third-quarter earnings season gets underway investors should brace for U.S. companies to report sizeable negative impacts due to the stronger U.S. dollar, analysts warned.

China September home price growth flatlines, fewer cities see price gains (Reuters) New home prices in China grew at a steady pace in September, with fewer cities reporting price gains, a relief for policymakers who remain wary of high debt and bubble risk and are refraining from stimulating the sector as the economy cools.

U.S. Commerce chief: U.S.-China trade deal doesn’t need to be inked next month (Reuters) The so-called phase one trade deal between the United States and China does not need to be finalized next month, U.S. Commerce Secretary said on Monday, adding that pact needed to be “right.”

A quiet exit for Draghi? Five questions for the ECB (Reuters) Mario Draghi’s last meeting as European Central Bank chief this Thursday may prove a lively gathering given a deep rift among policymakers over renewed asset purchases that threatens the effectiveness of policy.

Market Overview: US 10yr note futures are down -0.18% at 129-26, S&P 500 futures are up 0.31% at 2997.5, Crude oil futures are down -0.35% at $53.59, Gold futures are down -0.03% at $1493.6, DXY is down -0.11% at 97.177, CAD/USD is down -0.17% at 0.7631.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.655%	2 Year	1.59%
5 Year	1.578%	5 Year	1.583%
10 Year	1.576%	10 Year	1.778%
30 Year	1.676%	30 Year	2.283%

US Economic Data

10/21 – 10/25

Monthly Budget Statement, Sep Survey: $83.0b  Prior: $119.1b

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Oct 18  Survey: —  Prior: 58.0

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 unwinding most of earlier gains on Brexit headlines, heavy volume (570k TY futures), yields 1-2 bps lower led by the 7Y , with the 10Y 1.75 (-2bps), UK gilts retracing yest losses as Brexit deal optimism fades, thou latest news on DUP accepting latest proposals. S&P futures -0.3%, crude 53.05 (+0.26).   US retail sales expected +0.3% in Sep after 0.4% Aug (BBG), Fed releases Beige Book at 2:00PM. GOCs trailing tsys before Sep CPI –  median 2.1% vs 1.9% in Aug.

News headlines

Stocks Drop Amid Hong Kong Stress; Treasuries Gain: Markets Wrap (Bloomberg) American equity-index futures slipped on Wednesday while European shares struggled for traction as tensions over Hong Kong mounted and earnings season rolled on. Treasuries gained and the dollar was steady.

Futures slip on renewed U.S.-China trade war concerns (Reuters) U.S. stock index futures dipped on Wednesday as a new U.S. bill taking a hard line on China stoked fresh concerns about a prolonged trade war, but more positive results from the banking sector provided some relief and signaled a solid start to the third-quarter earnings season.

TSX futures edge up ahead of inflation report (Reuters) Canada’s main stock index futures were slightly higher on Wednesday ahead of the inflation data scheduled later in the day.

Oil Steady After Two Days of Losses as Demand Outlook Worsens (Bloomberg) Oil steadied near $53 a barrel after two days of declines as the fragile economic environment and unresolved U.S.-China trade war continue to deteriorate the outlook for global fuel demand.

U.S. ‘deeply concerned’ about untrackable China ships carrying Iran oil: officials (Reuters) The White House is warning Chinese shipping companies against turning off their ships’ transponders to hide Iranian oil shipments in violation of U.S. sanctions, two senior administration officials said.

Germany eyes emergency measures for Brexit market panic: source (Reuters) Germany could use emergency measures to counter any market panic from a hard Brexit, an official with direct knowledge of the matter said, such as banning bets on falling share prices, a step last used in the financial crisis.

U.S. dollar to remain dominant currency; euro, renminbi rising gradually: UBS survey (Reuters) The U.S. dollar will remain the world’s leading reserve currency over the next 25 years, with the euro and renminbi expected to further increase their share of total central bank reserves, according to UBS’ survey of sovereign institutions including major central banks released on Wednesday.

EU-British Brexit talks to resume in Brussels -UK spox (Reuters) Talks between British and EU negotiators on Brexit will resume in Brussels after a lunch break, a UK spokesman said as last-ditch efforts dragged on to seal a divorce deal this week before Britain is due to leave the bloc on Oct. 31. (Reporting by Gabriela Baczynska)

Market Overview: US 10yr note futures are up 0.241% at 130-03, S&P 500 futures are down -0.17% at 2992.75, Crude oil futures are up 0.59% at $53.12, Gold futures are up 0.03% at $1483.9, DXY is up 0.07% at 98.359, CAD/USD is up 0.07% at 0.7571.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.681%	2 Year	1.592%
5 Year	1.571%	5 Year	1.559%
10 Year	1.545%	10 Year	1.734%
30 Year	1.655%	30 Year	2.214%

US Economic Data

07:00 AM	MBA Mortgage Applications, Oct 11  Survey: — Actual: 0.50% Prior: 5.20%
08:30 AM	Retail Sales Advance MoM, Sep  Survey: 0.30%  Prior: 0.40%
	Retail Sales Ex Auto MoM, Sep  Survey: 0.20%  Prior: 0.00%
	Retail Sales Ex Auto and Gas, Sep  Survey: 0.30%  Prior: 0.10%
10:00 AM	NAHB Housing Market Index, Oct  Survey: 68  Prior: 68
	Business Inventories, Aug  Survey: 0.20%  Prior: 0.40%
02:00 PM	U.S. Federal Reserve Releases Beige Book
04:00 PM	Net Long-term TIC Flows, Aug  Survey: —  Prior: $84.3b
	Total Net TIC Flows, Aug  Survey: —  Prior: $43.8b
10/16 – 10/18	Monthly Budget Statement, Sep  Survey: $83.0b  Prior: $119.1b

Canadian Economic Data

08:30 AM	Int’l Securities Transactions, Aug  Survey: —  Prior: -1.17b
	CPI NSA MoM, Sep  Survey: -0.20% Prior: -0.10%
	CPI YoY, Sep  Survey: 2.10% Prior: 1.90%
	Consumer Price Index, Sep  Survey: 136.6  Prior: 136.8

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 on above avg volume (400k TY futures), 10Y 1.69% (-3.7bps). Equity futures higher, S&P +8, better results from JPM, J&J & BlackRock, thou Goldman Sachs missed Q3 est. German bunds higher, continuing from yest despite better than exp ZEW confidence. UK gilts outperforming, EU Barnie said Brexit deal still possible, GBP close to four-month highs, 10Y gilt futures supported by lingering uncertainty as meeting between Johnson and Northern Ireland leader Foster said to be ‘difficult’. GOCs opening the week higher, 10Y -4bps 1.48% after Friday’s 10bp selloff on another strong Cdn jobs no. Of note, long GOCs well bid in the selloff, 10s30s narrowest since last Nov. , 10s30s Can/US Box at July lows (i.e. GOC curve outflattening US)

News headlines

German investor sentiment falls less than expected in October (Reuters) The mood among German investors worsened less in October than analysts had expected, a survey showed on Tuesday, amid concern that Europe’s biggest economy might be headed for a recession

China Import Slump Casts Gloom Over World Buffeted by Trade War (Bloomberg) China is buying less from the rest of the world, pushing its trade surplus higher and dragging on global economic growth. Imports in the world’s second-largest economy dropped 8.5% in September for a ninth decline in the past 10 readings, while exports decreased 3.2% in dollar terms from a year earlier. That left a trade surplus of $39.65 billion for the month, with the total for the first nine months jumping 36% to $298 billion.

Sub-zero interest rates could be problematic in U.S.: Fed’s Bullard (Reuters) St. Louis Federal Reserve bank president James Bullard said on Tuesday that negative interest rates could be problematic in the United States. Central banks in the euro zone and Japan have cut interest rates below zero to boost inflation and economic growth, raising a debate about the ammunition other major central banks such as the U.S. Federal Reserve have to fight a slowdown.

China wants tariffs cut to enable $50 billion imports from U.S. (Bloomberg) China will struggle to buy $50 billion of U.S. farm goods annually unless the United States removes retaliatory tariffs on American products, Bloomberg reported on Tuesday. China would make the purchases only if U.S. President Donald Trump rolls back levies put in place since the trade war began, Bloomberg said bloom.bg/2OR9dvt, citing people familiar with the matter.

Boris Johnson’s Brexit Deal on Knife Edge (Bloomberg) U.K. Prime Minister Boris Johnson’s Brexit deal was hanging in the balance Tuesday, after the European Union Presidency said more time was needed before a summit of its leaders this week. Antti Rinne, premier of Finland — which currently has the rotating presidency of the EU — said negotiations may need to continue after the EU Council summit that starts Thursday.

The UK’s once star fund manager Neil Woodford was dealt another blow as his equity fund gets shut down (BI) The fall from grace for Neil Woodford, once known as the UK’s best-known stock picker, has climaxed on Tuesday with an announcement that he will cease control of the fund and it will be wound down. Link Fund Solutions (LFS), the fund’s authorized corporate director, announced the decision on Tuesday morning via its website, that it would be wind up the fund as soon as possible.

Chinese Inflation Surges as Pig Prices Fly High (WSJ) Surging pork prices pushed China’s consumer inflation to a near six-year high in September, complicating Beijing’s effort to stimulate growth but also giving it an incentive to buy more agricultural goods from the U.S. The consumer-price index rose 3% in September from a year earlier, according to data released by the National Bureau of Statistics on Tuesday, bumping up against Beijing’s inflation target of “around 3%” this year. The rise in consumer prices accelerated from August’s 2.8% expansion and topped a median forecast for 2.9% growth from economists polled by The Wall Street Journal.

Market Overview: US 10yr note futures are up 0.144% at 130-13, S&P 500 futures are up 0.3% at 2974.5, Crude oil futures are down -0.6% at $53.27, Gold futures are up 0.01% at $1497.7, DXY is up 0.07% at 98.52, CAD/USD is down -0.04% at 0.7559.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.625%	2 Year	1.553%
5 Year	1.486%	5 Year	1.513%
10 Year	1.469%	10 Year	1.689%
30 Year	1.607%	30 Year	2.169%

US Economic Data

12:00 AM

Monthly Budget Statement, Sep  Survey: $83.0b  Prior: $119.1b

Canadian Economic Data

09:00 AM	Existing Home Sales MoM, Sep  Survey: 2.00%  Prior: 1.40%
10:00 AM	Bloomberg Nanos Confidence, 40817  Survey: —  Prior: 5820.00%
10:15 AM	Bloomberg Oct. Canada Economic Survey,   Survey: 0.00%  )Actual: 0.00% Prior: 0.00%

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