Commentaires

Market Update

Trading mixed, long end firmer/off early European highs, yld curves mildly flatter, US10Y 1/53% (unch), average volume in TY before non farm payrolls. Sep employment expected +146, vs Aug. +130k despite ongoing trade dispute with China that has impacted manufacturing and investment. Private and service sector jobs projected +130k following +96k in August. Service employment growth expected +25k (temp for the 2020 census). Background: Final Sep IHS Markit Services Business Activity Index registered a 50.9 reading, virtually unchanged from the 50.7 est, but the employment sub index signaled the first contraction since 2010. September ISM Non-Manufacturing Index -3.8pp to 52.6, indicating slower services expansion. Weakness in manufacturing expected to hold down Sep headline number. ISM Manufacturing fell to a 10-yr low  47.3 in Sep and the employment sub index -1.1pp to 47.4.

News headlines

U.S. Stock Futures Slip, Bonds Steady Before Jobs: Markets Wrap (Bloomberg) U.S. equity futures declined and European stocks drifted as investors awaited jobs numbers for clues on whether the Federal Reserve will cut rates this month to bolster the world’s largest economy. Government bonds were mixed, with Treasuries little changed.

TSX futures edge lower ahead of U.S. jobs report (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Friday ahead of a key U.S. payrolls report, which will shed light on the health of the world’s largest economy.

Oil Set for Biggest Weekly Drop Since July on Demand Pessimism (Bloomberg) Oil headed for its biggest weekly decline since the middle of July as a streak of disappointing economic data added to fears a global recession is coming.

‘Sahm Rule’ enters Fed lexicon as fast, real-time recession flag (Reuters) Astronomers get to name comets and biologists get to name species, but come up with something cool in economics and you might be memorialized with a law or a rule or a “curve.”

Bordeaux wine barons bemoan Trump tariffs (Reuters) A U.S. move to impose 25% duties on their wares has brought little cheer to the wine barons of Bordeaux, who fear a possible hit to their business at a time of other problems.

EU to keep U.S. islands on tax blacklist, drop UAE, Switzerland (Reuters) European Union finance ministers are set to remove the United Arab Emirates (UAE) and Switzerland next week from the bloc’s lists of countries deemed to be acting as tax havens, an EU document said.

PRECIOUS-Gold gains on global growth fears, eyes on U.S. jobs data (Reuters) Gold rose on Friday on growing fears of a global economic slowdown and rising expectations of more U.S. interest rate cuts, with investors now looking for cues from U.S. jobs data.

Dollar set for first weekly drop in a month before U.S. jobs data (Reuters) The dollar steadied on Friday but was on track to post its first weekly drop in a month before monthly U.S. jobs data as weak data this week raised concerns the U.S. economy was losing momentum and could potentially undercut the greenback’s rally.

Market Overview: US 10yr note futures are down 0% at 131-24, S&P 500 futures are down -0.34% at 2901.75, Crude oil futures are up 0.4% at $52.66, Gold futures are down -0.02% at $1513.5, DXY is down -0.07% at 98.796, CAD/USD is down -0.19% at 0.7512.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.417%	2 Year	1.388%
5 Year	1.252%	5 Year	1.345%
10 Year	1.244%	10 Year	1.529%
30 Year	1.433%	30 Year	2.027%

US Economic Data

08:30 AM	Change in Nonfarm Payrolls, Sep  Survey: 145k  Prior: 130k
	Change in Private Payrolls, Sep  Survey: 130k  Prior: 96k
	Change in Manufact. Payrolls, Sep  Survey: 3k  Prior: 3k
	Unemployment Rate, Sep  Survey: 3.70%  Prior: 3.70%
	Average Hourly Earnings MoM, Sep  Survey: 0.20%  Prior: 0.40%
	Average Hourly Earnings YoY, Sep  Survey: 3.20%  Prior: 3.20%
	Average Weekly Hours All Employees, Sep  Survey: 34.4  Prior: 34.4
	Labor Force Participation Rate, Sep  Survey: 63.20%  Prior: 63.20%
	Underemployment Rate, Sep  Survey: —  Prior: 7.20%
	Trade Balance, Aug  Survey: -$54.5b  Prior: -$54.0b

Canadian Economic Data

08:30 AM	Int’l Merchandise Trade, Aug  Survey: -1.20b  Prior: -1.12b
10:00 AM	Ivey Purchasing Managers Index SA, Sep  Survey: —  Prior: 60.6

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 on above avg volume (380k TY), 10Y 1.58% (-2bps), one month low.  US equity futures under pressure since Europe, erasing gains with S&P +2 vs +12 earlier.  Core Euro bonds also higher, gilt yields 2-3bps lower after a weak Sep Services PMI (below 50) and news the EU views Boris Johnson’s newest proposals as ‘problematic’ . In the US a number of Fed speakers due as well as ISM non-manufacturing, Factory Orders & Durable Goods. In Canada, GOCs higher in line with tsys the CAD slightly weaker after falling the most in six months yesterday on surprise build in crude inventories, the most since May.

News headlines

U.S. Futures Erase Advance as Services Data Looms: Markets Wrap (Bloomberg) U.S. equity futures erased a gain on Thursday and European stocks edged lower as investors looked ahead to key data on the health of the world’s biggest economy. Shares fell across most of Asia, while government bonds advanced.

TSX futures slip as global growth concerns weigh on oil (Reuters) Futures for Canada’s main stock index edged lower on Thursday as oil prices slipped, pressured by concerns about global economic growth.

Oil Near Two-Month Low on Swelling U.S. Stockpiles, Demand Woes (Bloomberg) Oil held near the lowest level in almost two months as American crude inventories expanded the most since May and disappointing U.S. economic data added to pessimism over the demand outlook.

U.S. to slap tariffs on European planes, whiskey after WTO ruling (BNN) The price of Scotch, French wine, cheese and other European exports is about to go up in the U.S. after the Trump administration announced new tariffs on billions of dollars of EU products starting Oct. 18.

Yes whey! U.S. touts dairy product to Chinese hog farmers fighting swine fever (Reuters) When Beijing announced it was exempting 16 U.S. goods from retaliatory tariffs, Chinese firms hurried to call Proliant Dairy Ingredients in the heart of American farm country.

Fed still has ‘reasonable amount of independence’: Evans (Reuters) The U.S. Federal Reserve continues to enjoy “a reasonable amount of independence” and is focused on its mandate despite criticism of its policy moves by U.S. President Donald Trump, Chicago Federal Reserve Bank President Charles Evans said on Thursday.

India protectionist, but U.S. negotiating limited trade deal: Ross (Reuters) India is among the world’s most protectionist countries but the United States is trying to negotiate a limited trade deal with the South Asian nation to resolve their differences, U.S. Secretary of Commerce Wilbur Ross said on Thursday.

U.S. skies still bright for Main Street banks even as Wall Street frets (Reuters) The view from Wall Street may be all trade wars, tariffs and uncertainty these days, but ask a Main Street banker and things are pretty darn good.

Market Overview: US 10yr note futures are up 0.083% at 131-08, S&P 500 futures are up 0.06% at 2882.25, Crude oil futures are down -0.3% at $52.48, Gold futures are up 0.03% at $1508.3, DXY is down -0.01% at 99.012, CAD/USD is up 0.05% at 0.7499.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.472%	2 Year	1.468%
5 Year	1.305%	5 Year	1.417%
10 Year	1.284%	10 Year	1.579%
30 Year	1.468%	30 Year	2.064%

US Economic Data

07:30 AM	Challenger Job Cuts YoY, Sep  Survey: —  Actual: -24.80% Prior: 39.00%
08:30 AM	Initial Jobless Claims, Sep 28  Survey: 215k  Prior: 213k
	Continuing Claims, Sep 21 Survey: 1654k  Prior: 1650k
09:45 AM	Bloomberg Consumer Comfort, Sep 29  Survey: —  Prior: 61.7
	Markit US Services PMI, Sep F Survey: 50.9 Prior: 50.9
	Markit US Composite PMI, Sep F  Survey: —  Prior: 51.0
10:00 AM	ISM Non-Manufacturing Index, Sep  Survey: 55.0  Prior: 56.4
	Factory Orders, Aug  Survey: -0.20%  Prior: 1.40%
	Durable Goods Orders, Aug F  Survey: —  Prior: 0.20%
	Durables Ex Transportation, Aug F  Survey: —  Prior: 0.50%
	Cap Goods Orders Nondef Ex Air, Aug F  Survey: —  Prior: -0.20%
	Cap Goods Ship Nondef Ex Air, Aug F  Survey: —  Prior: 0.40%

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 trading higher maintaining gains from overnight ‘risk off’ session, yields 1-4bps lower led by the short end , 10Y 1.63% and the tsy curve 3 bps steeper.  Prices off the highs after Sep ADP 135k vs 140k exp with Aug revised lower 157k vs 195k. S&P futures -13pts, just off the lows, crude slightly higher after 11 straight days of declines.  FTSE -2% worst decline in two months after Boris Johnson threatened a no-deal Brexit unless a deal is done on his terms.  GOCs  mixed,curve steeper & wider vs tsys, 10Y 1.36%. BOC auctions $3.3bln of reopened 1.25% June 2030s with the J30/10Y roll 2.2/2.0

News headlines

U.S. Futures Fall With Europe Stocks; Dollar Rises: Markets Wrap (Bloomberg) U.S. stock-index futures retreated with Asian shares while equities sank across Europe as miserable manufacturing data from the world’s largest economy kept reverberating around markets. The dollar advanced.

TSX futures slip on global growth fears (Reuters) Futures for Canada’s main equity index fell on Wednesday after a weak U.S. manufacturing report added to global growth worries.

Oil Steady After Six-Day Slide Amid Tighter Supply, Demand Fears (Bloomberg) Oil steadied after sliding for six days in a row as signs of tighter supply in the U.S. and OPEC jostled with ongoing concern that a fragile global economy is eroding fuel demand.

German Growth Outlook Dims on Waning Export Demand, Trade Spats (Bloomberg) Germany’s five leading research institutes slashed their forecasts for economic growth, as manufacturers in Europe’s biggest economy struggle with waning global demand and lingering trade disputes.

WTO to back U.S. tariffs over Airbus subsidies (Reuters) The World Trade Organization is poised on Wednesday to open the door to hefty U.S. tariffs on European goods over illegal subsidies for Airbus, pushing a 15-year-old row over support for plane giants to the center of fraught global trade relations.

Italy says very worried by prospect of U.S. tariffs on its exports (Reuters) Foreign Minister Luigi Di Maio said on Wednesday that Rome was worried by the prospect of U.S. tariffs on Italian exports.

U.S. Fed charts its own course on climate change, too (Reuters) Dallas Federal Reserve President Robert Kaplan faced more questions on one particular topic than any other at a recent lunch with local business owners and community leaders on Texas’s Gulf Coast.

Hong Kong August retail sales worst on record as protests escalate (Reuters) Hong Kong’s August retail sales were the worst on record, the government said on Wednesday, as escalating anti-government protests that have gripped the Chinese-ruled city for nearly four months scared off tourists and battered spending.

Market Overview: US 10yr note futures are up 0.108% at 130-26, S&P 500 futures are down -0.43% at 2925.25, Crude oil futures are up 0.82% at $54.06, Gold futures are up 0.22% at $1492.3, DXY is up 0.08% at 99.205, CAD/USD is up 0.17% at 0.7549.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.512%	2 Year	1.516%
5 Year	1.365%	5 Year	1.472%
10 Year	1.352%	10 Year	1.625%
30 Year	1.515%	30 Year	2.089%

US Economic Data

07:00 AM	MBA Mortgage Applications, Sep 27  Survey: —  Actual: 8.10% Prior: -10.10%
08:15 AM	ADP Employment Change, Sep  Survey: 140k Actual: 135k Prior: 195k Revised 157k

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