Market Update

US tsys rallying since mid-morning, 10Y 1.785% (-3.5bps), heavy volume in TY futures (600k). Tsy prices were drifting lower until Trump comments ~5:00ET that the China deal might have to wait until after the 2020 presidential election.  Stock futures at the lows, S&P -22 (-0.70%), Dow -245, crude -0.60%. Core Euro bonds higher, lagging the move in tsys by 1bp in 10s.   GOCs higher, 10Y 3bps lower 1.495%. BOC tomorrow – no change in rates or outlook expected.  Data have come in close to expectations, capped off by last week’s 1.3% increase in Q3 GDP which showed resilience in both consumer spending and business investment.

News headlines

U.S. Stock Futures Drop as Trump Dents Trade Hopes: Markets Wrap (Bloomberg) U.S. equity futures retreated and stocks in Europe erased a gain as President Donald Trump said he might wait up to a year to complete a trade accord with China. Safe-haven assets climbed.

TSX futures fall after Trump hints at delay in U.S.-China trade deal (Reuters) Canada’s main stock index futures fell on Tuesday, after U.S. President Donald Trump said he had no deadline for reaching a trade agreement with China, adding it could come after the U.S. presidential election in November 2020.

Oil Falls as Trump Signals Long Wait for U.S.-China Trade Deal (Bloomberg) Oil slipped below $56 as U.S. President Donald Trump said there may be a long wait for a trade agreement with China, casting doubt about the strength of demand just days before the OPEC+ meeting.

Trump says China trade deal might have to wait for 2020 election (Reuters) U.S. President Donald Trump said a trade agreement with China might have to wait until after the U.S. presidential election in November 2020, denting hopes of a quick resolution to a dispute that has weighed on the world economy.

France and EU say primed to retaliate over U.S. tariff threat (Reuters) France and the European Union said on Tuesday they are ready to retaliate if U.S. President Donald Trump acts on a threat to impose duties of up to 100% on imports of champagne, handbags and other French products worth $2.4 billion.

Trump says new U.S. law on Hong Kong doesn’t help China trade talks (Reuters) U.S. President Donald Trump said on Monday U.S. legislation backing protesters in Hong Kong did not make trade negotiations with China easier, but added he believes Beijing still wants a deal with the United States.

European shares whacked lower as Trump says China trade deal may come only after Nov 2020 election (Reuters) European shares fell back into the red on Tuesday, abandoning earlier efforts to claw their way back from three days of falls, as U.S. President Donald Trump said a trade deal with China might be delayed until after November 2020 elections.

Trump, citing U.S. farmers, slaps metal tariffs on Brazil, Argentina (Reuters) U.S. President Donald Trump ambushed Brazil and Argentina on Monday, announcing tariffs on U.S. steel and aluminum imports from the two countries in a measure that shocked South American officials and left them scrambling for answers.

Japan preparing $120 billion stimulus package to bolster fragile economy (Reuters) Japan is preparing an economic stimulus package worth $120 billion to support fragile growth, two government officials with direct knowledge of the matter said on Tuesday, and complicating government efforts to fix public finances.

Market Overview: US 10yr note futures are up 0.339% at 129-11, S&P 500 futures are down -0.59% at 3095.75, Crude oil futures are down -0.57% at $55.64, Gold futures are up 0.45% at $1475.8, DXY is down -0.06% at 97.799, CAD/USD is up 0.08% at 0.7508.

Cda BenchmarksYieldTsy BenchmarksYield
2 Year1.581%2 Year1.572%
5 Year1.511%5 Year1.606%
10 Year1.5%10 Year1.784%
30 Year1.596%30 Year2.234%

US Economic Data

12/03Wards Total Vehicle Sales, Nov  Survey: 16.90m  Prior: 16.55m

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