Commentaires

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

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