Market Update
US tsys trading weaker on avg volume (375k TY fut), 10Y 1.78%, US equity futures extending gains since early NA trading, S&P +10, Nasdaq +34. Crude higher for a 4th day, OPEC discussing extending cuts of 1.2mln bbls/day by more than 400k as well as extending the agreement from March to June. German bunds lower despite surprise decline in Oct factory orders (-0.4% vs 0.4% exp), the absolute level of orders close to the lowest since 2016. GOCs continuing underperformance vs tsys post hawkish BOC yest, Can/US 5-7bps wider. In the near term, resilience in consumption and business demand lessen the pressure for the BOC to offset concerns over trade, while lower longer term mortgage rates continue to support housing demand.
News headlines
U.S. Futures, Stocks Advance as Bonds Edge Lower: Markets Wrap (Bloomberg) U.S. equity-index futures rose with European and Asian stocks on Thursday as investors maintained their fragile confidence that America could scrap a scheduled tariff hike on Chinese imports in 10 days. Bonds and the dollar edged lower.
TSX futures rise as oil prices gain (Reuters) Canada’s main stock index futures rose on Thursday, helped by gains in oil prices ahead of an OPEC meeting where members are expected to agree on increasing production cuts.
Oil Holds Gain as OPEC Ministers Gather for Vienna Meeting (Bloomberg) Oil held its biggest surge in more than two months as OPEC ministers gather in Vienna to discuss output cuts.
Gazing into the recession crystal ball (Reuters) The protracted trade war between China and the United States and a deteriorating global growth outlook have left investors nervous that the longest expansion in American history is at risk of ending.
Japan launches $122 billion stimulus to fight trade risks, post-Olympic slump (Reuters) Japan’s cabinet approved a $122 billion fiscal package on Thursday to support stalling growth in the world’s third-largest economy amid offshore risks and as policymakers look to sustain activity beyond the 2020 Tokyo Olympics.
China maintains tariffs must be reduced for phase one trade deal with U.S. (Reuters) Tariffs must be cut if China and the United States are to reach an interim agreement on trade, the Chinese commerce ministry said on Thursday, sticking to its stance that some U.S. tariffs must be rolled back for a phase one deal.
World food prices surge in November, lifted by meat, vegetable oils: U.N. FAO (Reuters) World food prices rose strongly in November, lifted by big jumps in prices of meat and vegetable oils, despite slightly lower cereals prices, the United Nations food agency said on Thursday.
Wall Street’s high-stake bets on calm less risky than they seem (Reuters) At a glance, a near-record accumulation of speculative bets on market tranquility looks like it couldn’t have come at a worse time.
CIBC quarterly profit misses estimates on higher loan loss provisions (Reuters) Canadian Imperial Bank of Commerce (CM.TO) reported quarterly profit that fell short of analysts’ estimates on Thursday, hurt by higher provision for bad loans and slower growth at its domestic banking business.
Market Overview: US 10yr note futures are up 0.06% at 129-16, S&P 500 futures are up 0.26% at 3119, Crude oil futures are up 0.34% at $58.63, Gold futures are up 0.21% at $1483.3, DXY is down -0.18% at 97.474, CAD/USD is down -0.24% at 0.7593.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.638% | 2 Year | 1.568% |
| 5 Year | 1.579% | 5 Year | 1.595% |
| 10 Year | 1.556% | 10 Year | 1.771% |
| 30 Year | 1.635% | 30 Year | 2.223% |
US Economic Data
| 07:30 AM | Challenger Job Cuts YoY, Nov Survey: — Actual: -16.00% Prior: -33.50% |
| 08:30 AM | Initial Jobless Claims, Nov 30 Survey: 215k Actual: 203k Prior: 213k |
| Continuing Claims, Nov 23 Survey: 1660k Actual: 1693k Prior: 1640k | |
| Trade Balance, Oct Survey: -$48.5b Actual: -47.2b Prior: -$52.5b | |
| 09:45 AM | Bloomberg Consumer Comfort, Dec 1 Survey: — Prior: 60.5 |
| 10:00 AM | Factory Orders, Oct Survey: 0.30% Prior: -0.60% |
| Durable Goods Orders, Oct F Survey: 0.60% Prior: 0.60% | |
| Durables Ex Transportation, Oct F Survey: 0.60% Prior: 0.60% | |
| Cap Goods Orders Nondef Ex Air, Oct F Survey: — Prior: 1.20% | |
| Cap Goods Ship Nondef Ex Air, Oct F Survey: — Prior: 0.80% |
Canadian Economic Data
| 08:30 AM | Int’l Merchandise Trade, Oct Survey: -1.45b Actual: -1.08b Prior: -0.98b |
| 10:00 AM | Ivey Purchasing Managers Index SA, Nov Survey: — Prior: 48.2 |
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