Commentaires

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

Market Update

US tsys higher, TY futures near the highs of the session on heavy volume (450k) with the 10Y 1.525%(-3bps). Risk off as the US considers limits of pension fund investments in Chinese equities, while NBA support for pro-democracy protests in Hong Kong has drawn ire from the Chinese govt.   US equities under pressure thru the o/n session, S&P futures -0.70%, while crude erased early gains, now -1.4%. Core Euro bonds higher led by 10Y gilts, 10Y German/UK spd below 100 bps for the first time since late March,  as talks with the EU are at a ‘critical point’ according to Uk govt sources (Guardian). GOCs higher, in line with tsys, 10Y 1.26%. Sep Housing Starts slightly stronger than exp (221k vs 220k)

News headlines

U.S. Futures, Stocks Slide as Trade Tensions Flare: Markets Wrap (Bloomberg) U.S. equity-index futures extended a retreat alongside European stocks on Tuesday as investor optimism over looming trade talks was knocked by news the White House is moving toward possible restrictions on capital flows into China. Treasuries and gold advanced.

TSX futures down on U.S.-China trade angst (Reuters) Canada’s main stock index futures fell on Tuesday, as trade tensions between the United States and China heightened after Washington blacklisted more Chinese companies ahead of high-level talks in Washington this week.

Oil Falls as U.S.-China Tensions Escalate Before Trade Talks (Bloomberg) Oil fell again, erasing earlier gains, as economic tensions between the U.S. and China flared ahead of talks aimed at resolving their long-running trade feud.

European stocks tumble further as Brexit, trade worries deepen (Reuters) European stocks tumbled further on Tuesday afternoon as worries about fresh uncertainty over Britain’s exit from the European Union and trade talks between China and the United States later this week deepened.

Recruiters pummeled by widespread economic angst (Reuters) Britain’s PageGroup (PAGE.L) and Robert Walters (RWA.L) warned on Tuesday that profit will be hit by a global recruitment squeeze as continuing geopolitical issues such as Brexit and the U.S.-China trade conflict dent economies.

Satellites to spy on smelters for copper traders (Reuters) A service will launch next week for funds managers, traders and miners that uses satellites to keep copper smelters under surveillance to get quick word of when they shut down and ramp up.

White House Zeroes In on Limit to Chinese Stocks in Pension Fund (Bloomberg) The Trump administration is moving ahead with discussions around possible restrictions on capital flows into China, with a particular focus on investments made by U.S. government pension funds, people familiar with the internal deliberations said.

Trudeau, rivals trade barbs in battle to break election logjam (BNN) Justin Trudeau took fire from all sides in the only English-language leaders debate ahead of an Oct. 21 vote that polls suggest remains the Canadian prime minister’s to lose.

Market Overview: US 10yr note futures are up 0.202% at 131-25, S&P 500 futures are down -0.6% at 2920, Crude oil futures are down -1.54% at $51.94, Gold futures are up 0.35% at $1509.7, DXY is down -0.06% at 98.905, CAD/USD is up 0.05% at 0.751.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.435%	2 Year	1.43%
5 Year	1.28%	5 Year	1.35%
10 Year	1.259%	10 Year	1.522%
30 Year	1.452%	30 Year	2.019%

US Economic Data

06:00 AM	NFIB Small Business Optimism, Sep  Survey: 102.0 Actual: 101.8 Prior: 103.1
08:30 AM	PPI Final Demand MoM, Sep  Survey: 0.10%  Prior: 0.10%
	PPI Ex Food and Energy MoM, Sep  Survey: 0.20%  Prior: 0.30%
	PPI Final Demand YoY, Sep  Survey: 1.80%  Prior: 1.80%
	PPI Ex Food and Energy YoY, Sep  Survey: 2.30%  Prior: 2.30%
10/08-10/11	Monthly Budget Statement, Sep  Survey: $96.5b  Prior: $119.1b

Canadian Economic Data

08:15 AM	Housing Starts, Sep  Survey: 220.0k Actual: 221.2k  Prior: 226.6k
08:30 AM	Building Permits MoM, Aug  Survey: 1.00%  Prior: 3.00%

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 slightly lower, 10Y 1.53%, giving up earlier gains as equity futures pare losses (S&P -8). ‘Risk off’ tone ahead of resumption of trade talks between the US & China, Chinese officials narrowing the scope of what issues they will negotiate according to BN. Core Euro bonds mixed , 10Y tsy/bund spread 1bp wider @ 212 despite weak German factory orders (-0.6% vs -0.3% exp). Last week’s massive US outperformance (10Y tsy -15bps vs -1bp for bunds) brought the 10Y spread to the narrowest in 18 months.  GOCs lower, 0.5-1bp wider vs tsys, data calendar picks up with Sep Housing Starts tomorrow and employment on Friday.  The BOC auctions $4.2bln in new 5Y bonds Wednesday –  March 1 2025s with the WI/5Y roll -0.1bps vs -2.9bps for the 5Y roll (Sep/Mar 24). Federal leaders debate tonite as well. Last week’s 10Y $1bln Enbridge issue definitely added to pressure on secondary spreads, bonds ended 170/168 vs 163.7 NI.

News headlines

U.S. Stock Futures Decline as Trade Roils Outlook: Markets Wrap (Bloomberg) Futures on U.S. equity indexes ticked lower while the yuan slipped on Monday on concern China may be increasingly reluctant to agree a broad trade deal with the Trump administration. European stocks gained and Treasuries fluctuated.

TSX futures edge lower on U.S.-China trade talk concerns (Reuters) Futures for Canada’s main stock index inched lower on Monday, pressured by worries over the outcome of the upcoming U.S.-China trade talks.

China narrows scope for trade deal with U.S. ahead of talks (BNN) Chinese officials are signaling they’re increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump, ahead of negotiations this week that have raised hopes of a potential truce.

Where the U.S.-Japan trade deal falls short of Trans-Pacific pact abandoned by Trump (Reuters) U.S. President Donald Trump has called his new trade deal with Japan a “phenomenal” victory for U.S. farmers.

Oil Edges Higher as Market Eyes Trade Talks Later This Week (Bloomberg) Oil pared its biggest weekly drop since July ahead of the resumption of U.S.-China trade talks later this week that may sway a cloudy demand outlook.

U.S. economists wrestle with how to help ‘left behind’ areas (Reuters) Boston Federal Reserve officials have a pretty good idea what helped the ailing industrial town of Lawrence, Massachusetts, start to make a turnaround, including a state takeover of the public school system and a focused effort to lift job options for working parents.

Low inflation? Nothing to worry about, Fed’s George says (Reuters) Kansas City Federal Reserve Bank President Esther George on Sunday rejected the notion that the U.S. central bank should cut interest rates to try to boost low inflation, which she said is largely a result of global forces that U.S. monetary policy can do little to counter.

German recession looms as industrial orders drop more than expected (Reuters) German industrial orders fell more than expected in August on weaker domestic demand, data showed on Monday, adding to signs that a manufacturing slump is pushing Europe’s largest economy into recession.

Market Overview: US 10yr note futures are down -0.107% at 131-25, S&P 500 futures are down -0.26% at 2943.25, Crude oil futures are up 1.23% at $53.46, Gold futures are down -0.51% at $1505.2, DXY is up 0.05% at 98.86, CAD/USD is down 0% at 0.7512.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.418%	2 Year	1.41%
5 Year	1.26%	5 Year	1.345%
10 Year	1.248%	10 Year	1.531%
30 Year	1.437%	30 Year	2.03%

US Economic Data

03:00 PM	Consumer Credit, Aug  Survey: $15.000b  Prior: $23.294b
10/07 – 10/11	Monthly Budget Statement, Sep  Survey: $93.0b  Prior: $119.1b

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Oct 4 Survey: —  Prior: 57.8

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