Market Update

Tsys trading lower yields 0.5 – 1.5bps higher with the 10Y 2.33 (+1.2bps), prices reversing early gains pressured by losses in European govt bonds. Euro equities down ~1.0%, the largest drop since August 29th , crude unch 56.90. Sharp selloff in German bunds, peripheral spds 1-2bps wider. The European commission’s new forecast sees  Eurozone GDP at 2.2% this yr vs 1.7% in the Spring, while ECB member Coeure said the Euro area recovery is the strongest ‘in almost twenty years’ . The US Treasury auctions $15bln in new 30Y bonds at 1:00pm, 30Y yields ~2.80% vs 2.87% at the last auction Oct12th which saw foreign participation rise from 8.3% to 12.2% the highest since March. GOCs trading lower, slightly underperforming tsys in the short end, provis unch after closing 1-2bps wider yest despite strong demand for BC 30y yest .

News headlines 

Trump Hits China for Unfair Trade But Blames Past U.S. Leaders (Bloomberg) President Donald Trump said China is taking advantage of American workers and American companies with unfair trade practices, but he blamed his predecessors in the White House rather than China for allowing the massive U.S. trade deficit to grow.

Saudi Billionaires Look to Move Funds to Escape Asset Freeze (Bloomberg) Wealthy Saudis are moving assets out of the region to avoid the risk of getting caught up in what authorities call a crackdown on corruption, according to six people with knowledge of the matter.

U.K. Cabinet Minister Resigns Over Secret Israeli Meetings (Bloomberg) Priti Patel resigned as U.K. international development secretary over talks with the Israeli government behind Prime Minister Theresa May’s back after more revelations of undisclosed visits came to light.

Brexit Talks Resume With EU Wary of U.K. Political Risk (Bloomberg) Brexit talks resumed Thursday with no indication that a breakthrough is in reach: the Europeans are taking a cautious approach even as both sides hope for an agreement by year-end.

Volatility Spikes, Exactly a Year After Trump Market Turmoil (Bloomberg) That’s what it seemed like late in Asian trading Thursday, when the Nikkei 225 Stock Average suddenly started to swoon, staging its biggest reversal (points-wise) since exactly a year ago. That’s when Donald Trump’s shock U.S. election victory rocked markets around the world — before they bounced back the next day

Dollar Declines as Stocks Drop; Treasuries Steady: Markets Wrap (Bloomberg) The dollar declined and Treasury yields fluctuated as President Donald Trump challenged China over what he called unfair trade practices. European stocks fell after a volatile session in Asian markets, while the euro and bund yields rose after the European Commission lifted its growth forecasts.

House Panel Set to Vote as Senate Enters Fray: Tax Debate Update (Bloomberg) It’s crunch time for Republican tax-writers on Thursday. The House Ways and Means Committee enters its final day of hammering out its tax-cut legislation, while a Senate panel plans to reveal its own version.

Airbus open to further Bombardier cooperation as it eyes Canadian fighter jet deal (Financial Post) Airbus SE could cooperate further with Bombardier Inc beyond a recent venture in the CSeries jets, if its fighter jet is permitted to compete in a Canadian military procurement, and its partners agree, an executive said on Wednesday.

Stock futures lower with earnings, housing data in focus (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Thursday as investors assessed corporate earnings and awaited monthly housing data.

Overnight markets

Overview: US 10yr note futures are down -0.075% at 125-05, S&P 500 futures are down -0.55% at 2576.75, Crude oil futures are up 0.04% at $56.83, Gold futures are up 0.26% at $1287, DXY is down -0.24% at 94.634, CAD/USD is down -0.15% at 0.7869.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.439% 2 Year 1.65%
5 Year 1.653% 5 Year 2.013%
10 Year 1.935% 10 Year 2.331%
30 Year 2.269% 30 Year 2.807%

US Economic Data

7:45 AM Bloomberg Nov. United States Economic Survey
8:30 AM Initial Jobless Claims, Nov 4th 239k est 232k (229k prior)
Continuing Claim, Oct 28th 1901k est 1885k (1884k prior)
9:45 AM Bloomberg Consumer Comfort, Nov 5th (51.7 prior)
10:00 AM Wholesale Trade Sales MoM, Sep est 0.9% (1.7% prior)
Wholesale Inventories MoM, Sep est 0.3% (0.3% prior)

Canadian Economic Data

8:30 AM New Housing Price Index MoM, Sep 0.2% est 0.2% (0.1% prior)
New Housing Price Index YoY, Sep 3.8% est 3.8% (3.8% prior)


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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230