Commentaires matinaux

Market Update

US tsys slightly lower on low volume in TY futures, 10Y 1.79%, curve flatter. Equity futures higher, S&P +6.5 and crude up 1.0%.  Quiet in core Euro bonds as well, bunds/gilts mixed. Mixed signals on Brexit –  EU Juncker saying a deal is possible before Oct 31 while the Irish foreign minister said the gap was still wide between the two parties. GOCs flat before  July Retail Sales –  0.6% increase m/m expected driven primarily by rising gas prices (2-3% m/m).

News headlines

U.S. Futures Rise With Europe Stocks; Oil Advances: Markets Wrap (Bloomberg) U.S. equity futures and European stocks climbed on Friday as a busy week of central bank meetings drew to a close, with focus now likely to shift back to the trade war. Treasuries edged higher for a fifth day.

CANADA STOCKS-TSX futures rise on higher oil prices (Reuters) Futures for Canada’s main stock index rose on Friday, as oil prices gained on rising Middle East tensions after a key Saudi Arabian supply hub was knocked out in an attack last weekend.

Oil Set for Biggest Weekly Gain Since January After Saudi Attack (Bloomberg) Oil was on track for its biggest weekly increase since January as traders waited to see whether Saudi Arabia can fulfill promises to swiftly repair a critical processing facility attacked last weekend.

China cuts new loan rate for second month but struggling economy likely needs more (Reuters) China cut its new one-year benchmark lending rate for the second month in a row on Friday, a step by the central bank to try to wrestle down borrowing costs and support the economy as the Sino-U.S. trade war drags on.

BOJ hopes new phrase will keep yen bulls at bay (Reuters) By adding vague new language to its latest policy statement, the Bank of Japan is hoping to keep unwanted sharp gains in the yen in check, without having to tap its depleted policy tool-kit or tying its hands on future monetary action.

Fed’s Bullard, explaining dissent, says U.S. manufacturing appears ‘in recession’ (Reuters) The U.S. manufacturing sector “already appears in recession” and overall economic growth is expected to slow “in the near horizon,” St. Louis Federal Reserve Bank President James Bullard said on Friday, explaining why he dissented at a recent Fed meeting and wanted a deeper, half percentage point rate cut.

Bank of Canada appoints Toni Gravelle as new deputy governor (BNN) The Bank of Canada has appointed Toni Gravelle as its new deputy governor.

Market Overview: US 10yr note futures are down -0.145% at 129-13, S&P 500 futures are up 0.21% at 3014.25, Crude oil futures are up 1.01% at $58.72, Gold futures are up 0.13% at $1508.1, DXY is up 0.18% at 98.446, CAD/USD is up 0.03% at 0.7537.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.607%	2 Year	1.745%
5 Year	1.466%	5 Year	1.664%
10 Year	1.431%	10 Year	1.788%
30 Year	1.577%	30 Year	2.229%

US Economic Data

12:00 PM

Household Change in Net Worth, 2Q  Survey: —  Prior: $4691b

Canadian Economic Data

08:30 AM	Retail Sales MoM, Jul  Survey: 0.60%  Prior: 0.00%
	Retail Sales Ex Auto MoM, Jul  Survey: 0.30%  Prior: 0.90%

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, yields ~3bps lower, 10Y 1.77% , above avg volume in TY futures (435k), tsy prices retracing part of post FOMC losses which saw the 10Y surge 10bps to 1.82%. Bunds paring losses, the OECD cut its outlook for global growth to 2.9% from 3.0%, the smallest rise since 2009 on US-China trade tensions, US GDP forecast for this year revised to 2.4% from 2.8%.  The NY Fed will conduct its third straight repo operation to maintain FF in 1.75-2% range, up to $75bln.  Yesterdays’ operation was oversubscribed with $81bln in bids for $75bln in securities. The USD-JPY cross currency basis swap widened 8bps to -30bps signalling increased demand for USD on the part of Japanese banks. GOCs underperforming tsys ~2bps, spreads holding steady after yesterday’s CPI, FOMC. Today sees the BOC auction $3bln in 2Y notes, reopening the 1.25% Nov 21s with the Nov21/2Y roll at -1.7/-1.9bps

News headlines

U.S. Futures, Dollar Dip as Europe Stocks Advance: Markets Wrap (Bloomberg) A split mood emerged across major markets on Thursday, with U.S. equity futures dropping and European stocks rising as investors processed a slew of fresh policy decisions following the Federal Reserve rate cut. The euro strengthened versus the dollar.

Futures lower after mixed signals from Fed (Reuters) Futures for Canada’s main stock index pointed to a lower opening on Thursday, tracking U.S. stock futures, after the U.S. Federal Reserve cut interest rates but set a higher bar for further reductions.

OECD warns of weakest global economic growth in a decade (BNN) Intensifying trade conflicts have sent global growth momentum tumbling toward lows last seen during the financial crisis, and governments are not doing enough to prevent long-term damage, the OECD said in its latest outlook.

Real crunch from Saudi Arabia’s oil outage has yet to be felt (Reuters) Saudi Arabia’s ability to avert a global oil supply crunch will only become clear in a few weeks, because for now its crude held in storage can fill the gap and mask the scale of damage to its facilities, traders and analysts say.

U.S., Chinese trade deputies face off in Washington amid deep differences (Reuters) U.S. and Chinese deputy trade negotiators were set to resume face-to-face talks on Thursday for the first time in nearly two months as the world’s two largest economies try to bridge deep policy differences and find a way out of a bitter and protracted trade war.

France and Germany united on strategy to fight global slowdown: French minister (Reuters) France and Germany are agreed on a joint strategy to respond to a global economic slowdown at a time of international trade tensions, French Finance Minister Bruno Le Maire said on Thursday.

Bank of England keeps rates steady, warns Brexit delay would hurt growth (Reuters) The Bank of England said Brexit uncertainty was causing slack to re-emerge in Britain’s economy and damaging productivity, and a failure to reach a transition deal by Oct. 31 could lead to further weakness.

Powell stresses solid U.S. outlook after Fed cuts rates again (BNN) Federal Reserve policy makers lowered their main interest rate for a second time this year and Chairman Jerome Powell said that “moderate” policy moves should be sufficient to sustain the U.S. expansion.

Market Overview: US 10yr note futures are up 0.109% at 129-17, S&P 500 futures are down -0.12% at 3005, Crude oil futures are up 2.01% at $59.28, Gold futures are down -0.38% at $1510.1, DXY is down -0.3% at 98.264, CAD/USD is down -0.13% at 0.7534.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.598%	2 Year	1.732%
5 Year	1.45%	5 Year	1.645%
10 Year	1.423%	10 Year	1.765%
30 Year	1.578%	30 Year	2.21%

US Economic Data

08:30 AM	Current Account Balance, 2Q  Survey: -$127.4b Actual: -$128.2  Prior: -$130.4b
	Philadelphia Fed Business Outlook, Sep  Survey: 10.5 Actual: 12.0  Prior: 16.8
	Initial Jobless Claims, Sep 14  Survey: 213k Actual: 208K  Prior: 204k Revised: 206k
	Continuing Claims, Sep 7  Survey: 1672k Actual:1661k  Prior: 1670k Revised: 1674k
09:45 AM	Bloomberg Consumer Comfort, Sep 15  Survey: —  Prior: 63.2
	Bloomberg Economic Expectations, Sep  Survey: —  Prior: 48.5
10:00 AM	Leading Index, Aug  Survey: -0.10%  Prior: 0.50%
	Existing Home Sales, Aug  Survey: 5.38m  Prior: 5.42m
	Existing Home Sales MoM, Aug  Survey: -0.70%  Prior: 2.50%

Canadian Economic Data

08:30 AM	ADP Canada Releases Aug. Payroll Estimates
	Teranet/National Bank HPI MoM, Aug  Survey: — Actual: 0.4%  Prior: 0.7%
	Teranet/National Bank HPI YoY, Aug  Survey: — Actual: 0.6%  Prior: 0.4%
	Teranet/National Bank HP Index, Aug  Survey: — Actual: 227.51  Prior: 226.57

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, yields 2-3bps lower, 10Y 1.77% , avg volume in TY futures (305k). Trading subdued before FOMC rate decision at 2:00PM – 25bp cut expected, update on balance sheet and ‘dot plot’ forecast. The Fed will buy up to $75bln in tsys this morning (QE ‘lite’) to alleviate o/n funding concerns with overnite repo still elevated at 2.8%. Core Euro bonds higher – EU Juncker warned on risks of no-deal Brexit, while UK Aug CPI came in below exp (1.7% vs 1.9%).  GOCs continue to underperform tsys, another 3bps wider this morning, with flattening at the long end the most notable development on the GOC curve – 10s30s 16bps has plunged from 28bps Sep 4th- the 10s30s Can/US Box flattest since July (i.e. GOC curve out flattening US 10bps over the month). CPI on deck – 00.2% forecast after 0.5% rise in July.

News headlines

Bonds Rally, Stocks Struggle as Traders Await Fed: Markets Wrap (Bloomberg) Bonds rallied globally while stocks struggled for traction as investors marked time until the Federal Reserve concludes its policy meeting Wednesday, with officials expected to cut interest rates again and possibly move further to calm overnight-loan markets. The dollar rose.

Futures edge higher ahead of U.S. Fed decision (Reuters) Futures for Canada’s main stock index inched higher on Wednesday ahead of the U.S. Federal Reserve’s monetary policy decision.

Oil Stabilizes as Saudi Output Restoration Calms Market Fears (Bloomberg) Oil stabilized on signs Saudi Arabia is quickly restoring production following a debilitating weekend attack, after two tumultuous days in which it surged the most on record and then pared almost half of that gain.

From oil shocks to funding strains, Fed confronts new complexities (Reuters) The Federal Reserve will conclude its latest policy meeting on Wednesday buffeted by conflicting economic data, under steady pressure from the White House for steep interest rate cuts, and confronted as well with an unexpected jump in overnight borrowing costs that may require action on its own.

Explainer: The Fed has a repo problem. What’s that? (Reuters) As if the U.S. Federal Reserve didn’t already have enough on its plate heading into its meeting on interest rates this week, chaos deep inside the plumbing of the U.S. financial system has thrown policymakers an unexpected curveball.

U.S. lawmakers urge Trump administration to restore India’s trade privileges (Reuters) Forty-four members of the U.S. Congress have urged President Donald Trump’s trade representative to restore trade concessions to India, saying the withdrawal of the privilege had led to retaliatory tariffs from New Delhi which were hurting U.S. industry.

Britain hopes for trade deal with Australia within months of Brexit (Reuters) Britain’s Trade Minister Liz Truss said on Wednesday she expects to complete a wide-ranging trade deal with Australia within months of exiting the European Union.

U.S. mortgage applications flat as rates jump: MBA (Reuters) U.S. mortgage applications were little changed on the week even as home borrowing costs jumped in step with a surge in bond yields during a selloff in the global fixed-income market, the Mortgage Bankers Association said on Wednesday.

Market Overview: US 10yr note futures are up 0.205% at 129-18, S&P 500 futures are down -0.17% at 3002.75, Crude oil futures are down -0.69% at $58.93, Gold futures are down -0.24% at $1509.8, DXY is up 0.16% at 98.419, CAD/USD is up 0.04% at 0.7547.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.604%	2 Year	1.703%
5 Year	1.47%	5 Year	1.629%
10 Year	1.448%	10 Year	1.774%
30 Year	1.612%	30 Year	2.244%

US Economic Data

07:00 AM	MBA Mortgage Applications, Sep 13  Survey: — Actual: -0.10% Prior: 2.00%
08:30 AM	Housing Starts, Aug  Survey: 1250k  Prior: 1191k
	Housing Starts MoM, Aug  Survey: 5.00%  Prior: -4.00%
	Building Permits, Aug  Survey: 1300k  Prior: 1336k
	Building Permits MoM, Aug  Survey: -1.30%  Prior: 8.40%
02:00 PM	FOMC Rate Decision (Upper Bound), Sep 18 Survey: 2.00%  Prior: 2.25%
	FOMC Rate Decision (Lower Bound), Sep 18 Survey: 1.75%  Prior: 2.00%
	Interest Rate on Excess Reserves, Sep 19  Survey: 1.85%  Prior: 2.10%

Canadian Economic Data

08:30 AM	CPI NSA MoM, Aug  Survey: -0.20%  Prior: 0.50%
	CPI YoY, Aug  Survey: 1.90%  Prior: 2.00%
	Consumer Price Index, Aug  Survey: 136.7  Prior: 137.0

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