Commentaires matinaux

Market Update

ECB – cuts deposit rate 10bps, strengthens forward guidance and link it to inflation, QE 20B/month, starting in Nov – open-ended and linked to the date of liftoff, which is tied to inflation. First take is more hawkish on the rate cut but fairly dovish in terms of both guidance and QE program is open-ended (though lower per month than we expected). Key question for press conf is what is communicated about the limits. Tiering broadly looks as expected. There has been little US-specific news to move USTs through the European session.  The market continues to focus on the positive developments over the past 24 hours of Trump extending the next increase of tariffs on China by 2 weeks. While it has also been cited that China will allow its firms to begin more purchases of US agricultural goods.

News headlines

U.S. Futures Climb on Trade; Euro Drops After ECB: Markets Wrap (Bloomberg) U.S. equity futures climbed with Asia stocks on Thursday as signs of goodwill in the trade war boosted risk appetite. The euro reversed its gain and European shares turned higher as policy makers lowered interest rates and restarted stimulus.

Futures little changed as oil prices dip (Reuters) Futures for Canada’s main stock index were little changed on Thursday after oil prices fell, as a meeting of the OPEC+ alliance yielded no discussion about deepening supply cuts.

As trade talks loom, Chinese firms look into buying U.S. farm goods (Reuters) Chinese companies have started to inquire about prices for U.S. agricultural goods purchases, Beijing said on Thursday, in a further sign of potential de-escalation in the bitter and protracted trade war between the world’s two largest economies.

OPEC members Iraq, Nigeria agree to cut oil output (Reuters) OPEC agreed on Thursday to trim oil output by asking over-producing members Iraq and Nigeria to bring production in line with their targets as the group strives to prevent a glut amid soaring U.S. production and a slowing global economy.

ECB cuts key rate, to restart bond purchases (Reuters) The European Central Bank approved a fresh stimulus package as expected on Thursday, cutting interest rates and approving a new round of bond purchases to prop up euro zone growth and halt a worrisome drop in inflation expectations.

Exclusive: Germany sees windfall from lower borrowing costs, sources say (Reuters) Germany foresees much lower borrowing costs because of record-low yields, and that could create a windfall of roughly 5 billion euros this year, maybe more, three people familiar with Berlin’s budget planning told Reuters on Thursday.

Trudeau enters campaign playing on a steady economic backdrop (BNN) Prime Minister Justin Trudeau, who called an election Wednesday, heads into the campaign with the economy on his side.

Trump delays China tariff increase by two weeks, until Oct. 15 (BNN)President Donald Trump said he was postponing the imposition of five per cent extra tariffs on Chinese goods by two weeks, a move that delays the next escalation of the trade war and brightens the backdrop for upcoming negotiations.

Market Overview: US 10yr note futures are up 0.192% at 130-05, S&P 500 futures are up 0.21% at 3010, Crude oil futures are down -1.76% at $54.77, Gold futures are up 1.34% at $1523.4, DXY is up 0.26% at 98.902, CAD/USD is up 0.03% at 0.7577.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.562%	2 Year	1.654%
5 Year	1.401%	5 Year	1.562%
10 Year	1.374%	10 Year	1.701%
30 Year	1.588%	30 Year	2.184%

US Economic Data

08:30 AM	CPI MoM, Aug  Survey: 0.10%  Prior: 0.30%
	CPI Ex Food and Energy MoM, Aug  Survey: 0.20%  Prior: 0.30%
	CPI YoY, Aug  Survey: 1.80%  Prior: 1.80%
	CPI Ex Food and Energy YoY, Aug  Survey: 2.30%  Prior: 2.20%
	CPI Core Index SA, Aug  Survey: 264.100  Prior: 263.569
	CPI Index NSA, Aug  Survey: 256.586  Prior: 256.571
	Real Avg Weekly Earnings YoY, Aug  Survey: —  Prior: 0.80%
	Real Avg Hourly Earning YoY, Aug  Survey: —  Prior: 1.30%
	Initial Jobless Claims, Sep 7  Survey: 215k  Prior: 217k
	Continuing Claims, Aug 31 Survey: 1675k  Prior: 1662k
09:45 AM	Bloomberg Consumer Comfort, Sep 8  Survey: —  Prior: 63.4
02:00 PM	Monthly Budget Statement, Aug  Survey: -$197.5b  Prior: -$119.7b

Canadian Economic Data

08:30 AM	New Housing Price Index MoM, Jul  Survey: 0.00%  Prior: -0.10%
	New Housing Price Index YoY, Jul  Survey: -0.20%  Prior: -0.20%

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

Tsy futures trading modestly weaker, off lows to top end overnight range last few minutes, decent volume (TYZ>395k). Yld curves unwind portion of wk’s bear steepening (3M10Y +35bp from last weeks lows).Treasuries have only seen small moves ahead of tomorrow’s key ECB meeting which has the potential to move fixed income markets globally as the ECB is expected to unveil its latest easing round. There has been little in the way of pure US news but Trump has been tweeting early this morning that the Fed should cut rates to zero or even lower. There was some movement overnight after the Global Times editor said that China would introduce measures to ease the negative impact of the trade way.

US Data release today Core PPI, it is expected to rebound to +0.2% after -0.1% in July. Headline PPI expected at +0.1% vs +0.2% in July on weak energy prices. Trade tensions and tariffs could drive up prices on select goods Food, trade services also expected to bolster PPI.

News headlines

U.S. Futures Drift as Stocks in Europe, Asia Climb: Markets Wrap (Bloomberg) U.S. stock-index futures drifted, failing to pick up momentum from a broad advance in equities in Europe and Asia after signs emerged that China will move again to lessen the trade war’s repercussions. Oil futures rose with the dollar.

Futures rise on hopes of easing U.S.-China trade tensions (Reuters) Futures for Canada’s main stock index edged higher on Wednesday, as investors were encouraged by hopes of a resolution to the Sino-U.S. trade standoff.

Trump calls on Fed to cut interest rates to zero ‘or less’ (BNN) The U.S. Federal Reserve should get interest rates down to “zero, or less,” and then start to refinance its debt, President Donald Trump said in early Wednesday tweet.

Oil Rises as Falling U.S. Stockpiles Offset Bolton’s Ouster (Bloomberg) Oil rose as industry data showed a decline in American stockpiles, countering speculation that the ouster of U.S. National Security Adviser John Bolton may lead to a less hawkish approach on Iran and Venezuela.

China starts tariff exemptions, but keeps pressure on U.S. farms (BNN) China announced a range of U.S. goods to be exempted from 25 per cent extra tariffs put in place last year, as the government seeks to ease the impact from the trade war without lifting charges on major agricultural items like soybeans and pork.

In a fracturing world, central banks still stuck together (Reuters) The last time major central banks shifted gears together, it was a cooperative move to keep the financial crisis of a decade ago from becoming a full-bore, worldwide depression.

Seoul to file WTO complaint over Japan’s ‘discriminatory’ export curbs (Reuters) South Korea plans to file a complaint over Japan’s tighter export controls at the World Trade Organization on Wednesday, accusing Tokyo of being “politically motivated” and “discriminatory” in an escalating row rooted in wartime history.

Oil curtailments hurting investment in Canadian energy: Suncor CEO (BNN) Suncor Energy Inc. President and Chief Executive Officer Mark Little said an investment chill remains in the oil and gas market, echoing comments made by his predecessor that there is a lack of investor confidence in the country’s energy sector.

Market Overview: US 10yr note futures are down -0.156% at 129-31, S&P 500 futures are up 0.16% at 2983.25, Crude oil futures are up 0.82% at $57.87, Gold futures are up 0.01% at $1499.4, DXY is up 0.33% at 98.654, CAD/USD is down -0.03% at 0.7606.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.59%	2 Year	1.666%
5 Year	1.432%	5 Year	1.58%
10 Year	1.415%	10 Year	1.725%
30 Year	1.604%	30 Year	2.203%

US Economic Data

07:00 AM	MBA Mortgage Applications, Sep 6  Survey: — Actual: 2.00% Prior: -3.10%
08:30 AM	PPI Final Demand MoM, Aug  Survey: 0.00%  Prior: 0.20%
	PPI Ex Food and Energy MoM, Aug  Survey: 0.20%  Prior: -0.10%
	PPI Final Demand YoY, Aug  Survey: 1.70%  Prior: 1.70%
	PPI Ex Food and Energy YoY, Aug  Survey: 2.20%  Prior: 2.10%
10:00 AM	Wholesale Inventories MoM, Jul F  Survey: 0.20%  Prior: 0.20%
	Wholesale Trade Sales MoM, Jul  Survey: —  Prior: -0.30%

Canadian Economic Data

08:30 AM

Capacity Utilization Rate, 2Q  Survey: 82.00%  Prior: 80.90%

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

Treasuries have underperformed both Bunds and gilts so far this morning.  There is very little in the way of key US data this afternoon with JOLTS the only highlight on a sparse calendar. Mildly weaker across the board, off early overnight lows/near top end of range on decent volume (TYZ >370k), yld curves scaling back some of Mon’s broad bear steepening. BoE Governor, Carney says with rates at 0.75% we have conventional space and unconventional space to ease policy. Now talking about counter cyclical buffer and how that can be eased to help bank lending which would give up to Stg300bln of balance sheet to lend.

News headlines

U.S. Stock Futures Drift as Treasuries Hold Steady: Markets Wrap (Bloomberg) U.S. equity futures drifted while European shares fell and Asian stocks were mixed as investors marked time before key central bank meetings in the coming days. The dollar strengthened.

TSX futures lower as gold prices drop (Reuters) Futures for Canada’s main stock index edged lower on Tuesday, weighed down by a drop in gold prices.

Oil Extends Gains Ahead of U.S. Stockpile Data, OPEC+ Meeting (Bloomberg) Oil extended its advance as U.S. stockpiles were estimated to have dropped and OPEC+ members gathered in the United Arab Emirates ahead of meetings this week.

U.S.-China trade war an opportunity for Turkey: Turkish minister (Reuters) Turkey sees opportunity to boost trade with the United States amid Washington’s trade war with Beijing, the Turkish trade minister said on Tuesday, reinforcing an ambitious goal of quadrupling the bilateral trade to $100 billion a year.

Many U.S. farmers fume at Washington, not Trump, over biofuel, trade policies (Reuters) American farmers helped elect President Donald Trump in 2016 on hopes he would shake up Washington and turn around a struggling agricultural economy, but many of his policies have actually stung farmers, notably his trade war with China and biofuel waivers for oil refiners.

Next EU chief says trade battle with U.S. would only benefit rivals (Reuters) Incoming European Commission President Ursula von der Leyen said on Tuesday that an escalating trade conflict between the European Union and the United States would only benefit their rivals.

Exclusive: Waning confidence over global recovery may nudge BOJ closer to easing – sources (Reuters) As the fallout from the U.S.-China trade war broadens, Bank of Japan policymakers are more open to discussing the possibility of expanding stimulus at their board meeting on Sept 18-19, sources familiar with their thinking say.

U.S. states launch antitrust probe of Google, advertising in focus (Reuters) Attorneys general from 48 U.S. states, the District of Columbia and Puerto Rico formally opened an antitrust probe on Monday into Alphabet’s Google, in a sign of growing government scrutiny of U.S. technology giants.

Market Overview: US 10yr note futures are down -0.179% at 130-20, S&P 500 futures are down -0.18% at 2972.75, Crude oil futures are up 0.97% at $58.41, Gold futures are down -0.73% at $1500.1, DXY is up 0.16% at 98.437, CAD/USD is up 0.04% at 0.7591.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.555%	2 Year	1.593%
5 Year	1.391%	5 Year	1.502%
10 Year	1.364%	10 Year	1.642%
30 Year	1.562%	30 Year	2.119%

US Economic Data

06:00 AM	NFIB Small Business Optimism, Aug  Survey: 103.5 Actual: 103.1 Prior: 104.7
10:00 AM	JOLTS Job Openings, Jul  Survey: 7331  Prior: 7348

Canadian Economic Data

08:15 AM	Housing Starts, Aug  Survey: 212.5k  Prior: 222.0k
08:30 AM	Building Permits MoM, Jul  Survey: 2.00%  Prior: -3.70%

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