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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

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