Commentaires matinaux

Market Update

US tsys following UK gilts lower on key Brexit developments, US 10Y 1.71% (+4bps), heavy volume for 2nd day above 560k TY contracts. UK gilt yields 5-8bps higher on positive news after EU rep Barnier had constructive meeting with UK Brexit secretary Barclay, GBP up another 1.4% after 2% rally yest to reach the highest since June. More optimism on trade , Trump/Liu meeting scheduled for this aft, comments yest from Trump about China being ‘nice in trade talks’. Crude +1.4% 54.25 after Iran tanker hit by missile with Saudi Arabia being blamed GOCs lower, yields 2-5bps higher led by the short end before Sep Labour Force data – 7.5K exp after Aug 81k with the unemployment rate unch at 5.7%

News headlines

Stocks Rally on Trade-Talk Optimism; Pound Surges: Markets Wrap (Bloomberg) Stocks rallied on Friday amid growing hopes that the U.S. and China can negotiate a trade truce as high-level talks progress into a second day. Treasuries fluctuated after Thursday’s slump while the pound surged on optimism for a Brexit deal.

TSX futures rise on higher oil prices (Reuters) Canada’s main index futures rose on Friday, as oil prices jumped on reports of missile attacks on an Iranian tanker in the Red Sea near Saudi Arabia.

Oil jumps above US$60 as Iran tanker attack reignites mideast risk (BNN) Oil jumped back above US$60 a barrel after reports of a missile strike on an Iranian tanker near the Saudi Arabian port city of Jeddah reignited fears over military escalation in the world’s most important crude-producing region.

Spend more if you want ECB to raise rates, Draghi tells governments (Reuters) Euro zone governments can help the European Central Bank raise interest rates sooner if they loosen their own purse strings to support the economy, ECB President Mario Draghi said on Friday.

Wall Street Week Ahead: Bruised U.S. banks expected to report third quarter earnings decline (Reuters) The biggest U.S. banks are expected to kick off the earnings season on a sour note next week due to falling interest rates, which may have pressured net interest margins enough to cause the sector’s first year-over-year earnings per share decline in three years.

Rising old used car prices help push poor Americans over the edge (Reuters) For America’s working poor, an often essential ingredient for getting and keeping a job – having a car – has rarely been more costly, and millions of people are finding it impossible to keep up with payments despite prolonged economic growth and low unemployment.

With U.S. tariffs looming, China drums up hope for a partial trade deal (Reuters) A Chinese state newspaper said on Friday that a “partial” trade deal would benefit China and the United States, and Washington should take the offer on the table, reflecting Beijing’s aim of cooling the row before more U.S. tariffs kick in.

Market Overview: US 10yr note futures are down -0.323% at 130-09, S&P 500 futures are up 0.99% at 2970, Crude oil futures are up 1.51% at $54.36, Gold futures are down -0.79% at $1489, DXY is down -0.38% at 98.327, CAD/USD is down -0.04% at 0.7527.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.584%	2 Year	1.579%
5 Year	1.445%	5 Year	1.528%
10 Year	1.441%	10 Year	1.703%
30 Year	1.612%	30 Year	2.19%

US Economic Data

08:30 AM	Import Price Index MoM, Sep  Survey: 0.00%  Prior: -0.50%
	Import Price Index ex Petroleum MoM, Sep  Survey: -0.10%  Prior: 0.00%
	Import Price Index YoY, Sep  Survey: -2.10%  Prior: -2.00%
	Export Price Index MoM, Sep  Survey: -0.10%  Prior: -0.60%
	Export Price Index YoY, Sep  Survey: —  Prior: -1.40%
10:00 AM	U. of Mich. Sentiment, Oct P  Survey: 92.0  Prior: 93.2

Canadian Economic Data

08:30 AM	Net Change in Employment, Sep  Survey: 7.5k  Prior: 81.1k
	Unemployment Rate, Sep  Survey: 5.70%  Prior: 5.70%
	Hourly Wage Rate Permanent Employees YoY, Sep  Survey: 3.80%  Prior: 3.80%
	Full Time Employment Change, Sep  Survey: 20.8  Prior: 23.8
	Part Time Employment Change, Sep  Survey: -7.7  Prior: 57.2
	Participation Rate, Sep  Survey: 65.7  Prior: 65.8

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 trading mixed, curve 1bp steeper with long end yields 1.5bps higher, 10Y 1.59%, heavy volume in TY futures (565k). Tsys initially rose in Asia on reports US-China trade talks would be curtailed, while it now seems China will seek a partial trade deal with the US and include a currency pact according to BN. Crude higher as OPEC said demand outstripped supply in Q3 by the widest margin in several years, thou it also lowered its forecast for oil demand for the 3rd month in a row, 980k b/d, down 40k from the Sep estimate. Core Euro bonds lower, yields 3-4bps higher, 10Y gilts lower for a second day – UK GDP accelerated in August on a 3m basis to 0.3% from 0.1% in July (0.1% exp). GOCs trading lower, 2-3bps wider vs US tsys, 10s heavy on the curve , CGBs at new weekly lows.

News headlines

Stocks Whipsawed Before Trade Talks; Dollar Slumps: Markets Wrap (Bloomberg) U.S. equity futures and European stocks fluctuated as a long-anticipated meeting on trade between America and China approached, and after contrasting reports on the talks spurred volatile trading in Asia. Treasuries were steady, while the dollar slumped.

CANADA STOCKS-TSX futures ease ahead of Sino-U.S. trade talks (Reuters) Canada’s main index futures edged lower on Thursday, ahead of U.S.-China trade talks starting later in the day.

Oil Holds Losses on Bearish Headwinds From Trade to Stockpiles (Bloomberg) Oil held losses near a two-month low as pessimism persisted over the global economic outlook and American crude inventories expanded more than expected.

Top-level U.S.-China trade talks resume as irritants sour atmosphere (Reuters) The United States’ and China’s top trade negotiators were set to meet on Thursday for the first time since late July to try to find a way out of a 15-month trade war as new irritants between the world’s two largest economies threatened hopes for progress.

UK economy on track to dodge pre-Brexit recession but outlook weak (Reuters) Britain’s sluggish economy looks to have dodged recession in the run-up to its deadline for leaving the European Union this month, official data showed on Thursday.

UK data show economy a bit weaker than expected: Carney (Reuters) Bank of England Governor Mark Carney said economic data published earlier on Thursday reflected how underlying growth was a bit weaker than the central bank had expected.

U.S. said to weigh currency pact with China as part of partial deal (BNN) The White House is looking at rolling out a previously agreed currency pact with China as part of an early harvest deal that could also see a tariff increase next week suspended, according to people familiar with the discussions.

ECB Meeting Account Shows Officials Far Apart on Stimulus (Bloomberg) European Central Bank officials were far apart on many elements of the stimulus package last month that led to public acrimony over the decision.

Market Overview: US 10yr note futures are up 0.048% at 131-11, S&P 500 futures are down -0.15% at 2914.5, Crude oil futures are up 0.44% at $52.82, Gold futures are down -0.03% at $1512.3, DXY is down -0.37% at 98.754, CAD/USD is down -0.19% at 0.7514.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.484%	2 Year	1.454%
5 Year	1.334%	5 Year	1.397%
10 Year	1.339%	10 Year	1.589%
30 Year	1.536%	30 Year	2.098%

US Economic Data

08:30 AM	CPI MoM, Sep  Survey: 0.10%  Prior: 0.10%
	CPI Ex Food and Energy MoM, Sep  Survey: 0.20%  Prior: 0.30%
	CPI YoY, Sep  Survey: 1.80%  Prior: 1.70%
	CPI Ex Food and Energy YoY, Sep  Survey: 2.40%  Prior: 2.40%
	CPI Core Index SA, Sep  Survey: 264.742  Prior: 264.245
	CPI Index NSA, Sep  Survey: 256.957  Prior: 256.558
	Real Avg Weekly Earnings YoY, Sep  Survey: —  Prior: 1.20%
	Real Avg Hourly Earning YoY, Sep  Survey: —  Prior: 1.50%
	Initial Jobless Claims, Oct 5  Survey: 220k  Prior: 219k
	Continuing Claims, Sep 28  Survey: 1651k  Prior: 1651k
09:45 AM	Bloomberg Consumer Comfort, Oct 6  Survey: —  Prior: 62.0

Canadian Economic Data

08:30 AM	New Housing Price Index MoM, Aug  Survey: -0.10%  Prior: -0.10%
	New Housing Price Index YoY, Aug  Survey: -0.40%  Prior: -0.40%

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

Trading weaker across the curve, just off recent lows on moderate volumes (TYZ>325k), US/China trade headlines (soybean purchases, China open to partial trade deal despite tech blacklist) spurring risk-on move, equities firmer (ESZ9 +23.0). China is open to a partial trade deal with the US despite a tech blacklist; FT reporting China to propose buying more soybeans (though corrected from original $10bln increase to say 10 tonne increase); Global Times editor Hu saying reports China delegation to stay for full agenda despite reports the D.C. visit would be cut short.  All this the morning after Fed`s Powell tipped don’t-call-it-QE bill purchases; 3M10Y opened flatter from Tues but has re-steepened, last -14.7bps.- In the end, equities higher, and Tsys a little weaker. The 2-Yr yield is up 2bps at 1.4395%, 5-Yr is up 2.6bps at 1.3777%, 10-Yr is up 2.9bps at 1.5579%, and 30-Yr is up 2.7bps at 2.0566%.  Dec 10-Yr futures (TY) down 5.5/32 at 131-17 (L: 131-14.5 / H: 131-26) Powell speaking again today at 10h30 at Fed Listens event in K.C.; Sep FOMC minutes out at 14h00.

News headlines

Stocks Rise on Fresh Trade-Deal Hopes; Dollar Dips: Markets Wrap (Bloomberg) U.S. index futures jumped along with stocks in Europe as China revived hopes of progress in trade talks with America this week despite a host of potential headwinds. Gold slipped with Treasuries.

TSX futures rise as Sino-U.S. trade concerns ease (Reuters) Futures for Canada’s main stock index pointed to a higher opening on Wednesday, after latest media reports eased U.S.-China trade worries.

Oil Rises Amid Optimism on Trade Talks, Turkish Military Action (Bloomberg) Oil erased losses amid optimism on trade talks scheduled to take place in Washington and signs of unrest near the border between Turkey and Syria.

China said open to partial U.S. trade deal despite tech blacklist (BNN) China is still open to agreeing a partial trade deal with the U.S., an official with direct knowledge of the talks said, signaling that Beijing is focused on limiting the damage to the world’s second-largest economy.

After spurned play for LSE, Hong Kong bourse to seek deeper China embrace (Reuters) Hong Kong stock exchange boss Charles Li ignited his unrequited overture to the London Stock Exchange with a riff on Romeo and Juliet as a corporate romance, and doused it in a wistful blog reference to the author of ‘Alice in Wonderland’.

Bank of England sets out rules of engagement for Facebook’s Libra (Reuters) The Bank of England set out the rules of engagement that Facebook’s Libra crypto-currency and other new digital payments providers would have to meet before they can open for business in Britain.

China plans to restrict visas for U.S. visitors with ‘anti-China’ links (Reuters) China is planning tighter visa restrictions for U.S. nationals with ties to anti-China groups, people with knowledge of the proposed curbs said, following similar U.S. restrictions on Chinese nationals, as relations between the countries sour.

Venture capital investments in U.S. set for another bonanza year (Reuters) U.S. venture capitalists are expected to pour over $100 billion into startups for a second straight year, following the record sum invested in 2018, according to a report released on Wednesday.

Market Overview: US 10yr note futures are down -0.142% at 131-17, S&P 500 futures are up 0.95% at 2920, Crude oil futures are up 0.99% at $53.15, Gold futures are up 0.37% at $1509.4, DXY is down -0.09% at 99.041, CAD/USD is down -0.17% at 0.7517.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.454%	2 Year	1.433%
5 Year	1.309%	5 Year	1.374%
10 Year	1.298%	10 Year	1.56%
30 Year	1.497%	30 Year	2.064%

US Economic Data

07:00 AM	MBA Mortgage Applications, Oct 4  Survey: —  Actual: 5.20% Prior: 8.10%
10:00 AM	JOLTS Job Openings, Aug  Survey: 7250  Prior: 7217
	Wholesale Trade Sales MoM, Aug  Survey: —  Prior: 0.30%
	Wholesale Inventories MoM, Aug F  Survey: 0.40%  Prior: 0.40%
02:00 PM	FOMC Meeting Minutes, Sep 18
10/09 – 10/11	Monthly Budget Statement, Sep  Survey: $93.0b  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