Market Update
US tsys trading higher before US jobs data, 10Y 1.795% (-2bps), avg volume in TY futures (350k). UK gilts leading EGBs higher, IPSOS poll shows narrowing conservative lead over labour before tonite’s final Johnson/ Corbyn debate. US payrolls forecast at 180k last month vs 128k Oct, the resolution of the GM strike expected to add 50k to the total figure. GOCs higher, in line with tsys, yields across the curve close to late Oct/Nov highs. Cdn employment expected to have rebounded 10k in Nov after 1.8k decline in Oct. Wages in the spotlight as well after October’s strong 4.4% gain. BOC deputy Lane yesterday noted the domestic economy remains resilient despite the impact from trade wars, while economic growth was evolving as expected.
News headlines
Stocks Advance With Bonds Before U.S. Jobs Data: Markets Wrap (Bloomberg) Stocks climbed alongside S&P 500 futures on Friday as investors counted down to U.S. jobs data and watched for any further developments ahead of the looming tariff deadline between America and China. Bonds also advanced.
TSX futures rise on trade optimism (Reuters) Futures for Canada’s main stock index edged up on Friday, as comments from U.S. President Donald Trump that trade talks with China were “moving right along” lifted investor sentiments.
Oil Near $58 as Traders Await Details on How OPEC+ Shares Cuts (Bloomberg) Oil traded near $58 a barrel as the market awaited crucial details on how OPEC+ will distribute cuts among its members.
Returning General Motors workers seen boosting U.S. November payrolls (Reuters) U.S. job growth likely accelerated in November as former striking workers returned to General Motors’ (GM.N) payrolls, which would confirm that the economy remained on a moderate expansion path despite a prolonged manufacturing slump.
Fed voters a less-hawkish bunch in 2020, lowering bar for U.S. rate cut (Reuters) The bar for cutting U.S. interest rates may get a little lower next year when a new crop of central bankers rotate into voting spots on the Federal Reserve’s policy-setting panel as part of its annual membership reshuffle.
Saudi, Russia win over oil producers to deeper cuts (Reuters) Saudi Arabia and Russia won backing for deeper output cuts from OPEC and allied oil producers on Friday as they look to head off global oversupply in 2020 and sustain prices.
China to waive tariffs on some U.S. soybeans, pork in goodwill gesture (Reuters) In a positive gesture, China said on Friday that it will waive import tariffs for some soybeans and pork shipments from the United States, as the two sides try to thrash out a broader agreement to defuse their protracted trade war.
World Bank adopts $1 billion-plus annual China lending plan over U.S. objections (Reuters) The World Bank on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025, despite the objections of U.S. Treasury Secretary Steven Mnuchin.
Canada’s bankers face the bleakest bonus year in almost a decade (BNN) For Canadian bankers, 2019 shaped up to be the worst year for bonuses in close to a decade.
Market Overview: US 10yr note futures are down 0% at 129-10, S&P 500 futures are up 0.18% at 3123.25, Crude oil futures are down -0.24% at $58.29, Gold futures are down -0.16% at $1480.7, DXY is up 0.02% at 97.433, CAD/USD is down 0% at 0.759.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.674% | 2 Year | 1.587% |
| 5 Year | 1.623% | 5 Year | 1.618% |
| 10 Year | 1.596% | 10 Year | 1.795% |
| 30 Year | 1.679% | 30 Year | 2.238% |
US Economic Data
| 08:30 AM | Change in Nonfarm Payrolls, Nov Survey: 180k Prior: 128k |
| Change in Private Payrolls, Nov Survey: 178k Prior: 131k | |
| Change in Manufact. Payrolls, Nov Survey: 40k Prior: -36k | |
| Unemployment Rate, Nov Survey: 3.60% Prior: 3.60% | |
| Average Hourly Earnings MoM, Nov Survey: 0.30% Prior: 0.20% | |
| Average Hourly Earnings YoY, Nov Survey: 3.00% Prior: 3.00% | |
| Labor Force Participation Rate, Nov Survey: — Prior: 63.30% | |
| 10:00 AM | Wholesale Inventories MoM, Oct F Survey: 0.20% Prior: 0.20% |
| Wholesale Trade Sales MoM, Oct Survey: — Prior: 0.00% | |
| U. of Mich. Sentiment, Dec P Survey: 97.0 Prior: 96.8 |
Canadian Economic Data
| 08:30 AM | Part Time Employment Change, Nov Survey: 15.0 Prior: 14.3 |
| Full Time Employment Change, Nov Survey: 10.0 Prior: -16.1 | |
| Net Change in Employment, Nov Survey: 10.0k Prior: -1.8k | |
| Unemployment Rate, Nov Survey: 5.50% Prior: 5.50% | |
| Hourly Wage Rate Permanent Employees YoY, Nov Survey: 4.50% Prior: 4.40% | |
| Participation Rate, Nov Survey: 65.7 Prior: 65.7 |
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