Market Update
Tsys slightly higher , 10Y 1.68%, TY futures close to highs of o/n range on low volume (300k), equities higher (S&P +4) before Oct Payrolls (85k exp). GM strike expected to distort data, subtracting overall figure by ~50k and adding 0.1% to unem rate (3.6 vs 3.5). GOCs slightly lower & flatter, continuing to undo some of the post BOC movement, which saw 5s30s steepen 5bps and Ca/US 8-12bps tighter. Futures mkts are priced for ~50% odds of a rate cut by March, which considering the uncertain global trade outlook is fair even as domestic data has held up well.
News headlines
U.S. Futures, Stocks Rise; Bonds Drift Before Jobs: Markets Wrap (Bloomberg) U.S. index futures climbed with European stocks on Friday as investors weighed better-than-expected Chinese manufacturing data against uncertainty over an interim trade deal. Treasuries were steady ahead of American payrolls figures.
TSX futures tick up on higher oil prices (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Friday, supported by gains in oil prices on the back of a surprise bounce in Chinese factory activity.
General Motors strike looms over U.S. October job growth (Reuters) U.S. job growth likely slowed sharply in October, weighed down by a strike at General Motors (GM.N), while the unemployment rate is expected to tick up from near a 50-year low of 3.5%.
Phase one trade deal with China is in good shape: U.S. Commerce chief (Reuters) The initial “phase one” trade pact with China appears to be in good shape and is likely to be signed around mid-November, although a finite date is still in question, U.S. Commerce Secretary Wilbur Ross said on Friday.
Wall Street Week Ahead: Travel, leisure company reports set to give view of economy, consumer (Reuters) A wide swath of the U.S. travel and leisure industry is set to provide insight next week on the state of the economy, including trends in consumer spending, fallout from U.S.-China trade tensions and any damaging impact from the stronger U.S. dollar.
Trump says U.S., China to announce new venue to ink trade deal soon (Reuters) U.S. President Donald Trump said on Thursday the United States and China would soon announce a new site where he and Chinese President Xi Jinping will sign a “Phase One” trade deal after Chile canceled a planned summit set for mid-November.
China’s proposed digital currency more about policing than progress (Reuters) As China prepares to become the first country to launch a digitized domestic currency, market participants and experts say it is a testament to both financial innovation and Beijing’s desire to have fail-safe control over its cash economy.
UK manufacturing decline slows after new Brexit stockpiling rush: PMI (Reuters) A renewed rush to stockpile ahead of another aborted Brexit deadline limited losses for British manufacturers last month, though not by enough to prevent a sixth month of contraction, a survey showed on Friday.
Market Overview: US 10yr note futures are up 0.06% at 130-12, S&P 500 futures are up 0.14% at 3040, Crude oil futures are up 0.79% at $54.61, Gold futures are down -0.13% at $1512.8, DXY is down -0.11% at 97.249, CAD/USD is down 0% at 0.7597.
US Economic Data
| 08:30 AM | Change in Nonfarm Payrolls, Oct Survey: 85k Prior: 136k |
| Change in Private Payrolls, Oct Survey: 80k Prior: 114k | |
| Change in Manufact. Payrolls, Oct Survey: -55k Prior: -2k | |
| Unemployment Rate, Oct Survey: 3.60% Prior: 3.50% | |
| Average Hourly Earnings MoM, Oct Survey: 0.30% Prior: 0.00% | |
| Average Hourly Earnings YoY, Oct Survey: 3.00% Prior: 2.90% | |
| Average Weekly Hours All Employees, Oct Survey: 34.4 Prior: 34.4 | |
| Labor Force Participation Rate, Oct Survey: 63.10% Prior: 63.20% | |
| 09:45 AM | Markit US Manufacturing PMI, Oct F Survey: 51.50 Prior: 51.50 |
| 10:00 AM | ISM Manufacturing, Oct Survey: 48.9 Prior: 47.8 |
| ISM Prices Paid, Oct Survey: 50.0 Prior: 49.7 | |
| Construction Spending MoM, Sep Survey: 0.20% Prior: 0.10% |
Canadian Economic Data
| 09:30 AM | Markit Canada Manufacturing PMI, Oct Survey: — Prior: 51.0 |
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