Market Update
US tsys sharply lower, heavy volume in TY futures (685k), 10Y 1.835% (+6bps), the selloff concentrated at the longer end of the curve with 2s30s 5bps wider. Better than expected China PMIs seen driving weakness in tsys and EGBs – China Manufacturing PMI rose to 50.2 in Nov, the first expansionary reading since April. US equity futures giving up gains since early NA trading, S&P +2.5 from +13 earlier. Focus on the ISM Manufacturing Index at 10:00ET. GOCs lower, underperforming tsys by 2bps out to 10yrs. BOC meeting on Wed, no change in rates exp (<5% odds of cut), we do not see any change in the outlook – Q3 GDP was on consensus with surprising strength in consumption and domestic demand, while policy remains accomodative
News headlines
U.S. Stock Futures Trim Gains on Trump Tariff Move: Markets Wrap (Bloomberg) U.S. equity futures pared a gain and Europe stocks turned lower as a move on tariffs by America overshadowed solid factory data and reminded investors of lingering trade risks. Government bonds slid.
CANADA STOCKS-TSX futures rise on higher oil prices (Reuters) Futures for Canada’s main stock index were higher on Monday, as oil prices rose, supported by hints that OPEC and its allies may agree to deepen output cuts at a meeting this week.
Trump says he will restore tariffs on Brazil, Argentina metal imports (Reuters) U.S. President Donald Trump on Monday said he would immediately restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina, prompting at least one counterpart to vow talks with the Republican president.
Euro zone factory activity shrank in November but worst may be over: PMI (Reuters) Euro zone manufacturing activity contracted for a 10th straight month in November although the bloc’s battered factories may have turned a corner as forward-looking indicators in Monday’s survey appear to have passed a nadir.
U.S. dollar at six-month highs vs yen, NZ dollar shines after upbeat China data (Reuters) The U.S. dollar scaled a six-month high versus the Japanese yen and New Zealand’s currency jumped to near four-month peaks on Monday after an unexpected rebound in Chinese manufacturing activity lifted hopes of a brighter outlook for world growth.
Oil Rebounds on Speculation That OPEC+ Could Deepen Output Cuts (Bloomberg) Oil rebounded from the biggest weekly loss since October on speculation that OPEC+ could defy expectations by deepening its production cuts.
Saudi Arabia wants OPEC+ to deepen oil cuts due to Aramco IPO (Reuters) OPEC and its allies plan to deepen oil cuts and have the deal in place so it runs at least until June 2020 as Saudi Arabia wants to deliver a positive surprise to the market before the listing of Saudi Aramco, two sources familiar with the talks said.
Market Overview: US 10yr note futures are down -0.338% at 128-30, S&P 500 futures are up 0.1% at 3146.75, Crude oil futures are up 1.99% at $56.27, Gold futures are down -0.5% at $1465.4, DXY is down -0.03% at 98.248, CAD/USD is up 0.13% at 0.752.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.62% | 2 Year | 1.624% |
| 5 Year | 1.55% | 5 Year | 1.662% |
| 10 Year | 1.537% | 10 Year | 1.829% |
| 30 Year | 1.623% | 30 Year | 2.268% |
US Economic Data
| 09:45 AM | Markit US Manufacturing PMI, Nov F Survey: 52.2 Prior: 52.2 |
| 10:00 AM | ISM Manufacturing, Nov Survey: 49.2 Prior: 48.3 |
| ISM Prices Paid, Nov Survey: 47.0 Prior: 45.5 | |
| ISM New Orders, Nov Survey: — Prior: 49.1 | |
| Construction Spending MoM, Oct Survey: 0.40% Prior: 0.50% |
Canadian Economic Data
| 08:30 AM | MLI Leading Indicator MoM, Oct Survey: — Actual: 0.40% Prior: 0.20% |
| 09:30 AM | Markit Canada Manufacturing PMI, Nov Survey: — Prior: 51.2 |
| 10:00 AM | Bloomberg Nanos Confidence, Nov 29 Survey: — Prior: 55.0 |
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