Commentaires

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

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