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Market Update

US tsys higher on avg volume (320k TY futures), US 10Y 1.70% (-2bps), flattening in UST curve with 3m10Y -20bps close to middle of -50 to +5 range over past month.  NY Fed repo operation bought $30bln in 14 day repo and was 2x oversubscribed. UK gilts rallied after Supreme Court ruled PM Boris Johnson’s suspension of parliament was unlawful, 10Y gilt future at weekly high. GOCs  higher, in line with tsys, 10s30s 1bp steeper last two days after sharp narrowing since late Aug. On Thursday the BOC will conduct a switch operation, buying back off the run 33s,37s & 41s in exchange for Dec 51s with a maximum of $400mln. Eco data calendar picks up only next week with July GDP.

News headlines

Stocks Climb on Trade Optimism; Treasuries Edge Up: Markets Wrap (Bloomberg) U.S. equity-index futures advanced with European stocks while Asian shares rose modestly as investors weighed hopes for high-level trade talks next month between America and China against mixed economic data from around the globe. The pound rose after a court ruling key to Brexit.

TSX futures advance on U.S.-China trade hopes (Reuters) Futures for Canada’s main stock index rose on Tuesday on trade optimism after Washington said the United States and China would resume trade talk in two weeks.

Oil Slips on Signs of Returning Saudi Output as Doubts Linger (Bloomberg) Oil edged lower on signs Saudi Arabia is making progress in restoring lost output even as uncertainty remains about the kingdom’s ability to meet its timeline of a full return by the end of the month.

China grants new tariff waivers for U.S. soybean imports: Bloomberg (Reuters) China has granted new waivers to several domestic state and private firms exempting them from retaliatory tariffs on soybeans imported from the United States, Bloomberg said, citing unidentified sources familiar with the matter.

Pound rallies, stocks slip on UK Supreme Court ruling (Reuters) Sterling extended gains on Tuesday while eurozone stocks tumbled after Britain’s Supreme Court ruled that British Prime Minister Boris Johnson had acted unlawfully when he advised Queen Elizabeth to suspend Parliament this month.

BOJ’s Kuroda says any easing will target short-, medium-term rates (Reuters) Bank of Japan Governor Haruhiko Kuroda said on Tuesday that if the central bank were to ease monetary policy further, it would aim at pushing down short- and medium-term interest rates without flattening the yield curve too much.

Argentina’s markets, caged by controls, strain beneath the surface (Reuters) Argentina’s volatile markets look to have been tamed by capital controls imposed by President Mauricio Macri after a sharp sell-off in August. Beneath the surface, however, signs suggest trouble is brewing.

Market Overview: US 10yr note futures are up 0.036% at 130-04, S&P 500 futures are up 0.31% at 3006.25, Crude oil futures are down -0.95% at $58.08, Gold futures are down -0.17% at $1528.9, DXY is down -0.02% at 98.576, CAD/USD is down -0.04% at 0.7544.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.555%	2 Year	1.675%
5 Year	1.392%	5 Year	1.579%
10 Year	1.351%	10 Year	1.701%
30 Year	1.51%	30 Year	2.145%

US Economic Data

09:00 AM	FHFA House Price Index MoM, Jul  Survey: 0.30%  Prior: 0.20%
	S&P CoreLogic CS 20-City MoM SA, Jul  Survey: 0.10%  Prior: 0.04%
	S&P CoreLogic CS 20-City YoY NSA, Jul  Survey: 2.10%  Prior: 2.13%
	S&P CoreLogic CS 20-City NSA Index, Jul  Survey: —  Prior: 217.65
10:00 AM	Richmond Fed Manufact. Index, Sep  Survey: 1  Prior: 1
	Conf. Board Consumer Confidence, Sep  Survey: 133.0  Prior: 135.1

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, yields 2-3bps lower, 10Y 1.70%(-2.4bps), heavier volume in TY futures, S&P futures unch, crude -0.60%.  Core Euro bonds seeing strong rally on weak data, bund curve 5bps flatter with the 10Y -6bps @ -0.58% –  German Man PMI  fell to 41.4 in Sep from 43.5, well below 44 expected and the lowest since June 2009.  Meanwhile the Service PMI unexpectedly declined as well, to 52.5 from 54.8. Gilts tighter vs bunds – the Supreme Court expected to give an update on the UK govt’s decision to prorogue parliament. GOCs higher, 1bp narrower vs 2Y tsys – July Wholesale sales came in much stronger than exp 1.7% vs unch,  some relief after July Retail Sales disappointed.

News headlines

Gloomy European Data Hits Stocks as Bonds Advance: Markets Wrap (Bloomberg) U.S. equity futures fluctuated and European stocks retreated as disappointing data in the euro area overshadowed easing concern about trade relations between America and China. Treasuries rose and the common currency slid.

Futures edge up as higher gold offsets lower oil (Reuters) Futures for Canada’s main stock index were slightly higher on Monday, as gains in gold prices on global growth worries offset a pullback in oil prices.

Oil Drops Amid Conflicting Reports About Speed of Saudi Recovery (Bloomberg) Oil fell as traders weighed conflicting reports on whether Saudi Arabia will succeed in restoring its lost production by the end of this month, while concerns over demand returned following gloomy European data.

Markets face major risks over lax climate forecasts, top investors warn (Reuters) Financial markets risk major disruptions by relying on business-as-usual forecasts that underestimate the impact of climate-change policies that are expected to abruptly tighten next decade, a leading group of investors has warned.

Chinese U.S. homebuying to hit eight-year low, says leading property site (Reuters) U.S. home sales to Chinese buyers are likely to drop to an eight-year low in the year ending next March as a prolonged Sino-U.S. trade war hits demand, according to estimates from Chinese real estate website Juwai.com.

Graphic: Repo ructions – Then and now (Reuters) Investors were jolted last week when rates in an obscure part of the U.S. lending market spiked, prompting fears of bigger problems for the financial market and broader economy.

Draghi’s Highway to Inflation Goal Risks Ending in Taper Tantrum (Bloomberg) The European Central Bank’s new message on how long it’ll keep interest rates low is supportive for the economy, but could prove risky for markets.

Market Overview: US 10yr note futures are up 0.349% at 130-05, S&P 500 futures are up 0.03% at 2990.25, Crude oil futures are down -0.57% at $57.76, Gold futures are up 0.64% at $1524.8, DXY is up 0.2% at 98.713, CAD/USD is up 0.13% at 0.753.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.541%	2 Year	1.669%
5 Year	1.387%	5 Year	1.579%
10 Year	1.348%	10 Year	1.694%
30 Year	1.505%	30 Year	2.135%

US Economic Data

08:30 AM	Chicago Fed Nat Activity Index, Aug  Survey: -0.03  Prior: -0.36
09:45 AM	Markit US Manufacturing PMI, Sep P  Survey: 50.4  Prior: 50.3
	Markit US Services PMI, Sep P  Survey: 51.4  Prior: 50.7
	Markit US Composite PMI, Sep P  Survey: —  Prior: 50.7

Canadian Economic Data

08:30 AM	Wholesale Trade Sales MoM, Jul  Survey: 0.00%  Prior: 0.60%
10:00 AM	Bloomberg Nanos Confidence, Sep 20  Survey: —  Prior: 56.7

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 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