Market Update

US tsys trading weaker but off the lows after weak ADP (67k vs 135k), US 10Y 1.74% (+2.5bps), heavy volume in TY futures (855k), S&P futures +14, crude +2% 57.20.  US & China have moved closer to phase 1 trade deal according to BN, despite Trump comments yest that deal could wait until after US election. Selloff in gilts, 10Y gilt/bund spd 3bps wider, polling data show consistent lead for Tories with prospect of majority govt (MNI). GOCs lower & 2bps wider vs tsys before BOC, despite consensus of no change in rates or outlook from October.

News headlines

Stocks Rebound on Fresh Hopes for U.S.-China Deal: Markets Wrap (Bloomberg) U.S. equity futures advanced with European stocks after a news report that China and America were moving closer to a trade deal, despite heated rhetoric. Treasuries slipped along with the dollar.

TSX futures rise on higher oil prices, BoC rate decision eyed (Reuters) Canada’s main stock index futures rose on Wednesday, as oil prices gained in the run-up to meetings where OPEC and its allies are expected to extend output cuts, while investors awaited the central bank’s decision on interest rates.

Bank of Canada likely to hold and remain an outlier (BNN) Bank of Canada Governor Stephen Poloz, one of the few central bankers to resist the global push toward easier monetary policy, will probably maintain his wait-and-see approach this week.

Oil Rallies on Renewed Trade Deal Prospects Before OPEC+ Meeting (Bloomberg) Oil gained as the U.S. and China were moving closer to a trade deal and before OPEC+ decides on its output-cut policy later this week.

China warns U.S. over Uighur bill, raising doubts over early trade deal (Reuters) China warned on Wednesday that U.S. legislation calling for a tougher response to Beijing’s treatment of its Uighur Muslim minority will affect bilateral cooperation, clouding prospects for a near-term deal to end a trade war.

A pricey French import goes mainstream in Democratic primary (Reuters) U.S. Senator Elizabeth Warren has carried the idea of a wealth tax onto the center stage of American politics, but the roots were planted far away, in a young French economist’s work unraveling the flow of money through global tax havens.

EU seeks talks with U.S. on French goods tariff threat, ready to act (Reuters) The European Union would prefer talks with the United States to discuss Washington’s threat of tariffs on French luxury goods, but is ready to take action if that fails, the head of the European Commission Ursula von der Leyen said on Wednesday.

OPEC gearing up for deeper oil cuts, Russia yet to agree (Reuters) OPEC is gearing up to deepen production cuts later this week but still needs to agree with allies such as Russia over details of a deal to support oil prices and head off a looming oil glut next year.

U.S. private sector job growth at six-month low in November: ADP (Reuters) U.S. private employers added the fewest jobs in six months in November, well shy of economists’ expectations, a report by a payrolls processor showed on Wednesday.

Explainer: ECB to soul-search over policy goals (Reuters) The European Central Bank will conduct an overarching review of its policy strategy soon, looking at everything from the definition of its inflation target to fighting climate change.

Market Overview: US 10yr note futures are down -0.24% at 129-23, S&P 500 futures are up 0.47% at 3105.5, Crude oil futures are up 1.78% at $57.1, Gold futures are down -0.07% at $1483.3, DXY is down -0.08% at 97.654, CAD/USD is down -0.16% at 0.7534.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.579% 2 Year 1.554%
5 Year 1.517% 5 Year 1.57%
10 Year 1.494% 10 Year 1.745%
30 Year 1.592% 30 Year 2.195%

US Economic Data

07:00 AM MBA Mortgage Applications, Nov 29  Survey: —  Actual: -9.20% Prior: 1.50%
08:15 AM ADP Employment Change, Nov  Survey: 135k Actual: 67k Prior: 125k
09:45 AM Markit US Services PMI, Nov F  Survey: 51.6  Prior: 51.6
        Markit US Composite PMI, Nov F  Survey: —  Prior: 51.9
10:00 AM ISM Non-Manufacturing Index, Nov  Survey: 54.5  Prior: 54.7

Canadian Economic Data

08:30 AM Labor Productivity QoQ, 3Q  Survey: 0.20% Actual: 0.20% Prior: 0.20%
10:00 AM Bank of Canada Rate Decision, Dec 4  Survey: 1.75%  Prior: 1.75%

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