Commentaires

Market Update

– US tsys opening higher, the 10Y yield lower for a sixth day 1.56% (-2.3bps) as early risk on tone in Asia quickly evaporated as European trading got underway.  European stocks lower led by financials & energy – Deutsche Bank down another 2.9% – the bank has denied asking the German govt for assistance. Commerzbank down 2.7% on reports the bank plans to eliminate 9,000 jobs and suspend dividends. Crude ~2.5% lower on doubts oil ministers will be able to agree to a freeze at the Algiers meeting. Core Euro bonds higher, curved flatter on lower stocks. In the US 5 & & yr note auctions today and Wed also supporting the flattenning trade.  In Canada, GOCs higher outperforming tsys out to 5yrs, with longs lagging 10s30s ~1.5bps steepr at 67.5. Provis  wider for a second day on risk off, Ont 26s 85.5/ after reaching new lows ~83.5 last Wed, rumouts of supply also weighing on the mkt.

News headlines                                                                                         

–European Stocks Drop, Oil Slides as Clinton Rally Is Short Lived (Bloomberg) European stocks fell for a third day as losses among carmakers, energy producers and banks damped a global rally fueled by Hillary Clinton’s performance in the first American presidential debate.

–Oil prices slip as hopes for a deal in Algiers fade (Reuters) Crude futures fell further on Tuesday as optimism faded for an output-limiting deal during an oil producer meeting in Algeria that so far has failed to yield any agreement to curb one of the worst supply gluts in history.

–France unlikely to achieve 2017 deficit target: fiscal watchdog (Reuters) France is unlikely to meet its 2017 budget deficit target, the country’s independent fiscal watchdog said on Tuesday, casting doubt on the government’s plan to cut the shortfall to less than 3 percent of output.

–Deutsche Bank Returns to Haunt Merkel in an Election Year (Bloomberg) In April 2008, as the global financial crisis was brewing, Angela Merkel hosted a 60th birthday reception in her Berlin chancellery for Deutsche Bank’s then-chief executive Josef Ackermann. Eight years later, her government is doing its best to keep Germany’s biggest bank at arm’s length.

–WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call (Reuters) The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.

–BOJ Nakaso: Structural reforms need to accompany ultra-easy policy (Reuters) The Bank of Japan has taken steps to push down real interest rates but structural reforms are also needed to boost the economy’s growth potential, the central bank’s deputy governor Hiroshi Nakaso said on Tuesday.

–Rogers, Shaw to shutter video streaming service Shomi in November after less than two years (FinancialPost) Shomi, a made-in-Canada answer to Netflix, is bowing out of the growing video streaming market. The less than two-year-old service, a joint venture between Rogers Communications Inc. and Shaw Communications Inc., will shut down on Nov. 30, the two companies announced Monday.                                                                                                                   

Overnight markets

– Overview: US 10yr note futures are up 0.2261% at 131-20, S&P 500 futures are up 0.04% at 2140.5, Crude oil futures are down -2.59% at $44.74, Gold futures are down -0.63% at $1335.6, DXY is up 0.31% at 95.595.                                                                                

US Economic Data               

– 9:45 AM: Markit US Services PMI, Sep P, est. 51.2 (prior 51.0)

Markit US Composite PMI, Sep P, (prior 51.5)

– 10:00 AM: Consumer Confidence Index, Sep, est. 99.0 (prior 101.1)

Richmond Fed Manufacturing Index, Sep, est. -2 (prior -11)

Canadian Economic Data

-There is major economic data release 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Le Fonds de solidarité FTQ et deux autres partenaires investissent 21 millions $ dans la création d’une nouvelle société de biotechnologie à Laval.

Ilkos Thérapeutique a comme mission de développer un traitement de l’ulcère veineux chronique des membres inférieurs. Cette affection touche de 1% à 1,5% de la population et représente de 1,5% à 2% du budget total de la santé publique au pays.

Outre le Fonds FTQ, le groupe de partenaires comprend le Fonds CTI Sciences de la Vie et Servier Canada. Ils investissent 7 millions $ chacun.

L’investissement va permettre de mener une étude de phase 2A sur un composé administré par voie orale auprès de plus de 200 patients en Amérique du Nord et en Europe.

«Ce nouveau traitement vise à devenir le traitement de référence dans ce domaine et représente donc une avancée clinique potentiellement majeure», avance-t-on.

En tout, Ilkos Thérapeutique créera une dizaine d’emplois directs et en sous-traitance.

Market Update

– Tsys opening higher,10Y yields lower for a fifth straight day, on ‘risk off’ session as Euro stocks are off 1.6%, Nikkei fell 1.25% & US stock futures moving lower as well. Deutsche Bank fell ~7% to a record low on news the German govt has ruled out assistance.  Crude oil rebounding on speculation producers will agree to cur production at this Wednesday’s meeting in Algiers. German bunds trading higher on sharp declines in bank stocks with the 10Y bund ~1bp lower at -0.096%. German business sentiment rebounded sharply in Sept, based on the 3pt jump in the latest IFO index to a 27-month high. JGBs mixed with the long end lower, curve 4bps steeper – Kuroda said the BOJ’s move to control the Japanese govt yield curve will give them more flexibility with its bond purchase program. In Canada, GOCs opening higher lagging the rally in tsys by 1-2bp across the curve, yet after Friday’s impressive 6bp outperformance on weak Cdn CPI & retail sales. Strong buying in CGBs led the 10Y sector higher Friday, ~2bps narrower on the GOC curve. Provi spreads resisted the move lower in GOC yields, 10Y Onts trading up at 82.5 Fri aft – Ont 10Y yield has broken below the lows of July at 1.85%. Spds opening this morn unch, Ont rumoured for this morn given where spds/yields are.  First Cap Realty reopened their 10Y issue on Thurs at 217, now 220/215.

News headlines                                                                                                                                  

– Stocks Drop on Bank, Commodity Company Woes; Turkish Lira Falls (Bloomberg) European stocks headed for their biggest drop since July as banks and energy producers dragged equities lower around the world, prompting investors to retreat to   the safety of government bonds and the yen.

– Oil rises as OPEC meets, volatility hits post-Doha high (Reuters) Oil rallied on Monday as the world’s largest producers gathered in Algeria to discuss ways to support the market, with nervous trade driving volatility to its highest since exporters met in April. Scepticism about any deal being reached has prompted money managers to cut their bullish bets to a one-month low last week, when prices fell by nearly 5 percent, dented by signs Saudi Arabia and Iran were making little progress in achieving a preliminary agreement to freeze production.

– Deutsche Bank Slumps to Fresh Record Low on Capital Concerns (Bloomberg) Deutsche Bank AG shares dropped to a record low amid concerns that mounting legal bills, including a looming fine over its pre-crisis mortgage bond business, may force the German lender to raise capital. The shares declined as much as 6.9 percent and traded at 10.71 euros at 12:38 p.m. in Frankfurt, down 6.1 percent. That brings losses to about 53 percent this year. The 38-member Bloomberg Europe Banks and Financial Services Index slipped 2.4 percent, with Deutsche Bank the worst performer.

– IMF welcomes BOJ new policy framework, sees 2 percent inflation elusive (Reuters) The International Monetary Fund said on Monday that a new monetary policy framework adopted by the Bank of Japan marked « progress », but stuck to its view that the central bank won’t be able to hit its ambitious 2 percent inflation goal anytime soon.

– China launches $52.5 billion state enterprise restructuring fund, report says (Reuters) China has launched a 350 billion yuan ($52.5 billion) restructuring fund as the government pushes ‘supply-side’ reforms that have included mergers of inefficient state enterprises and laying off workers in struggling sectors such as coal and steel. The China State-owned Enterprises Restructuring Fund will be managed by the State-owned Assets Supervision and Administration Commission (SASAC), the Economic Information Daily, a newspaper run by the official Xinhua news agency, reported on Monday.

– Carney’s Corporate-Bond Purchases May Worsen Liquidity Squeeze (Bloomberg) The start of the Bank of England’s corporate-bond buying program on Tuesday may exacerbate already tight liquidity in the sterling debt market. The central bank plans to purchase 10 billion pounds ($13 billion) of sterling investment-grade corporate debt over 18 months, heightening competition in a relatively small market that is dominated by investors who favor sterling assets, such as U.K. pension funds. It also adds to a wider debt-market pinch, partly caused by the start of a similar European Central Bank corporate-bond buying program in June.                                                                                                                  

Overnight markets

– Overview: US 10yr note futures are up 0.1431% at 131-7, S&P 500 futures are down -0.43% at 2148.75, Crude oil futures are up 1.39% at $45.1, Gold futures are up 0.07% at $1342.6, DXY is down -0.27% at 95.222.

US Economic Data

– 10:00 AM:  New Home Sales, Aug, est. 600k (prior 654k)

New Home Sales, m/m, Aug, est. -8.3% (prior 12.4%)

– 10:30 AM:  Dallas Fed Manufacturing Activity, Sep, est. -3.0 (prior -6.2)

Canadian Economic Data

-There is major economic data release 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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