Market Update
US tsys trading unch before Dec payrolls (160k exp vs 266 in Nov), 10Y 1.85%, avg volume in TY futures (~310k). US equity futures giving up most of o/n gains (S&P +4), crude moving lower as well. GOCs outperforming tsys out the curve, 1.5bps tighter vs US 10s. Poloz yesterday took a more upbeat on recent economic developments, noting the tightness in the labor market and robust housing market, as well as the rebound in business investment. Cdn employment expected to have rebounded 25k in Dec after a 71k decline, with the unemployment rate down a notch to 5.8% from 5.9% in nov.
News headlines
U.S. Futures Climb Before Jobs Report; Bonds Drift: Markets Wrap (Bloomberg) American equity futures advanced while European stocks edged higher as all eyes turned to the U.S. jobs report after a tumultuous week in global markets. Treasuries drifted.
Stock Futures firm ahead of key jobs report (Reuters) U.S. stock index futures rose on Friday, helped by gains in high-growth technology names including Apple, while investors turned to the closely watched jobs report for confirmation that the world’s largest economy remains healthy.
TSX futures rise as Middle East conflict abates (Reuters) Canada’s main stock index futures rose on Friday as a de-escalation in U.S.-Iran tensions boosted appetite for riskier assets.
Oil Set for Biggest Weekly Loss Since July as Mideast Risk Eases (Bloomberg) Oil headed for its biggest weekly loss since July as the prospect of an immediate confrontation between the U.S. and Iran abated, allaying fears of disruption to Middle East energy supplies.
U.S. job growth seen slowing in December after robust gains (Reuters) U.S. job growth likely slowed in December, but the pace of hiring probably remains more than enough to keep the longest economic expansion in history on track despite a deepening downturn in a manufacturing sector stung by trade disputes.
As U.S. election heats up, investors brace for volatility (Reuters) A U.S. stock market that has weathered trade wars, weak corporate earnings, and now a U.S.-Iran conflict to continually hit record highs faces a new obstacle: the 2020 U.S. election season.
Dollar set for best weekly gain in two months on ‘galvanizing’ forces (Reuters) The U.S. dollar rose on Friday and is on track for its biggest weekly gain in two weeks as dissipating geopolitical tension prompted investors to buy riskier currencies, while the Japanese yen and the Swiss franc gave up all their recent gains.
‘Crucial’ jobs data to reveal extent of Canada’s economic slump (BNN) Jobs data on Friday are poised to reveal just how weak the Canadian economy is.
Poloz says Bank of Canada watching global trade impacts (BNN) The head of the Bank of Canada says the central bank will be watching for signs that fallout from trade disputes currently affecting Canada’s manufacturing sector has spilled over into additional industries.
Market Overview: US 10yr note futures are down 0% at 128-29, S&P 500 futures are up 0.22% at 3283.25, Crude oil futures are up 0.13% at $59.64, Gold futures are down -0.26% at $1550.2, DXY is up 0.05% at 97.494, CAD/USD is up 0.07% at 0.7655.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.635% | 2 Year | 1.578% |
| 5 Year | 1.595% | 5 Year | 1.653% |
| 10 Year | 1.588% | 10 Year | 1.851% |
| 30 Year | 1.706% | 30 Year | 2.322% |
US Economic Data
| 08:30 AM | Change in Nonfarm Payrolls, Dec Survey: 160k Prior: 266k |
| Change in Private Payrolls, Dec Survey: 153k Prior: 254k | |
| Change in Manufact. Payrolls, Dec Survey: 5k Prior: 54k | |
| Unemployment Rate, Dec Survey: 3.50% Prior: 3.50% | |
| Average Hourly Earnings MoM, Dec Survey: 0.30% Prior: 0.20% | |
| Average Hourly Earnings YoY, Dec Survey: 3.10% Prior: 3.10% | |
| Average Weekly Hours All Employees, Dec Survey: 34.4 Prior: 34.4 | |
| Labor Force Participation Rate, Dec Survey: — Prior: 63.20% | |
| Underemployment Rate, Dec Survey: — Prior: 6.90% | |
| 10:00 AM | Wholesale Inventories MoM, Nov F Survey: 0.00% Prior: 0.00% |
Canadian Economic Data
| 08:30 AM | Net Change in Employment, Dec Survey: 25.0k Prior: -71.2k |
| Hourly Wage Rate Permanent Employees YoY, Dec Survey: 4.20% Prior: 4.40% | |
| Unemployment Rate, Dec Survey: 5.80% Prior: 5.90% | |
| Full Time Employment Change, Dec Survey: — Prior: -38.4 | |
| Part Time Employment Change, Dec Survey: — Prior: -32.8 | |
| Participation Rate, Dec Survey: 65.6 Prior: 65.6 |
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