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Market Update

US tsys higher on FTQ after this weekend’s developments in the middle east, 10Y 1.835% (-6bps), heavy volume in TY futures (565k). Brent crude +11% , 66.70 after surging to $72 in reaction to strike on Saudi refining facility responsible for 5% of global oil supply. Trump will release oil from the US SPR alleviating some of the damage.  Trump, Pompeo warning Iran over the attacks, saying it must be held accountable. Gold higher, S&P futures -0.30% paring earlier losses of ~1.0% .  GOCs lagging the rally, yields 2-4bps lower led by the 10Y (1.47%). Busy data week with Aug CPI Wed, July Retail Sales Friday.

News headlines

Saudi Attack Spurs Shift to Havens as Crude Soars: Markets Wrap (Bloomberg) Oil surged and havens climbed after a strike on the heart of Saudi Arabia’s crude production heightened geopolitical risk. U.S. futures slipped with European stocks, while shares in Asia were mixed.

Futures lower after attack on Saudi facilities (Reuters) Futures for Canada’s main stock index were lower on Monday after a weekend attack on crude facilities in Saudi Arabia disrupted global oil supplies and fueled worries over the impact of an oil shock on economic growth.

Biggest oil price surge since 1991 as ‘locked and loaded’ U.S. points finger at Iran for attack (Reuters) An attack on Saudi Arabia that shut 5% of global crude output caused the biggest surge in oil prices since 1991, after U.S. officials blamed Iran and President Donald Trump said Washington was “locked and loaded” to retaliate.

China’s economy slows again, adding pressure for policy action (BNN) China’s slowdown is deepening just as risks for the global economy mount, piling pressure on the authorities to do more to support growth.

Exclusive: Greece seeks new mining jobs, higher royalties in talks with Eldorado (Reuters) Greece is in talks with Canada’s Eldorado Gold to secure higher royalties from its mining development projects and new jobs, Energy Minister Kostis Hatzidakis said on Monday.

Gold climbs 1% as attacks on Saudi facilities spur demand (Reuters) Gold rose more than 1% on Monday after an attack on key oil facilities in Saudi Arabia inflamed worries over the stability of the Middle East, driving investors to seek refuge in assets seen as a haven from risk.

Copper drifts lower on fragile China data, zinc gains (Reuters) Copper slipped on Monday after weak Chinese data fuelled worries about demand, but zinc hit a 1-1/2 month peak after a mine suspension.

Market Overview: US 10yr note futures are up 0.365% at 129-02, S&P 500 futures are down -0.33% at 2998.5, Crude oil futures are up 10.03% at $60.35, Gold futures are up 0.83% at $1512, DXY is up 0.19% at 98.445, CAD/USD is down -0.25% at 0.7546.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.617%	2 Year	1.753%
5 Year	1.478%	5 Year	1.699%
10 Year	1.466%	10 Year	1.84%
30 Year	1.675%	30 Year	2.305%

US Economic Data

08:30 AM

Empire Manufacturing, Sep  Survey: 4.0  Prior: 4.8

Canadian Economic Data

08:30 AM	Int’l Securities Transactions, Jul  Survey: —  Prior: -3.98b
09:00 AM	Existing Home Sales MoM, Aug  Survey: 1.30%  Prior: 3.50%
10:00 AM	Bloomberg Nanos Confidence, Sep 13  Survey: —  Prior: 56.5

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 tsy yields 2-4bps higher, 10Y 1.83 (+5bps) after strong Aug Retail Sales (0.4% vs 0.2%), TY futures at new lows for the month, prices having almost completely retraced the Aug-Sep rally. Tsy yield curve continuing steeper with 3M10Y +3bps at 15bp inverted from late August low -55bps. Bund yields 12-15bps higher since yesterday’s ECB stimulus announcement and whipsaw reaction in bunds, adding to pressure on global yields. GOC yields 1-2bps higher after US data, lagging the move in the US. Active day for primary issuance including $600mln Alta 50s, $300mln Montreal 29s  $500mln Gibson Energy HY 10Y @ 217 which closed 210 mid.

News headlines

Stocks Set for Weekly Gain as Bonds Extend Retreat: Markets Wrap (Bloomberg) U.S. equity futures rose with Asian and European stocks as shares globally headed for a third weekly gain thanks to easing trade fears and a new round of central bank stimulus. Treasury yields climbed and the dollar slipped.

Futures rise on hint of progress in U.S.-China trade talks (Reuters) Futures for Canada’s main stock index edged higher on Friday as investors cheered signs of progress in U.S.-China trade talks.

Oil Set for Weekly Drop as IEA Warns OPEC Faces Looming Surplus (Bloomberg) Oil is set for its biggest weekly decline in nearly two months as the International Energy Agency warned of a looming supply glut.

Trump trade-war aid sows frustration in farm country (Reuters) The U.S. government is paying Texas cotton farmer J. Walt Hagood $145 an acre for losses related to U.S. President Donald Trump’s trade policies. But Minnesota soybean farmer Betsy Jensen will get just $35 an acre.

China to exempt U.S. pork, soybeans from additional tariffs: Xinhua (Reuters) China will exempt some agricultural products from additional tariffs on U.S. goods, China’s official Xinhua News Agency said Friday, in the latest sign of easing Sino-U.S. tensions before a new rounds of talks aimed at curbing a bruising trade war.

Time to buy? Argentina’s bargain basement stocks start to gain appeal (Reuters) Argentina’s stocks, which crashed last month to multi-year lows, are starting to lure in hardy investors tempted by bargain basement prices, even as the country teeters on the brink of default ahead of a general election next month.

Democrats in presidential debate hint at no swift end to China tariffs (Reuters) Democratic presidential hopefuls criticized President Donald Trump’s trade war with China but gave no hint they would work toward a quick resolution if elected, pledging during their debate on Thursday to hold Beijing accountable for “corrupt” practices.

Shopify helps power TSX to new all-time high (BNN) Canadian stocks climbed into uncharted territory Thursday.

Market Overview: US 10yr note futures are down 0% at 129-14, S&P 500 futures are up 0.3% at 3022.75, Crude oil futures are down -0.05% at $55.06, Gold futures are up 0.48% at $1514.7, DXY is down -0.3% at 98.017, CAD/USD is up 0.05% at 0.7566.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.612%	2 Year	1.726%
5 Year	1.472%	5 Year	1.652%
10 Year	1.455%	10 Year	1.794%
30 Year	1.674%	30 Year	2.274%

US Economic Data

08:30 AM	Import Price Index MoM, Aug  Survey: -0.50%  Prior: 0.20%
	Import Price Index YoY, Aug  Survey: -2.00%  Prior: -1.80%
	Retail Sales Advance MoM, Aug  Survey: 0.20%  Prior: 0.70%
	Retail Sales Ex Auto MoM, Aug  Survey: 0.10%  Prior: 1.00%
	Retail Sales Ex Auto and Gas, Aug  Survey: 0.20%  Prior: 0.90%
10:00 AM	U. of Mich. Sentiment, Sep P  Survey: 90.80  Prior: 89.80
	Business Inventories, Jul  Survey: 0.30%  Prior: 0.00%

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

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