Market Update
US tsys weaker with equity futures higher (S&P +20, Nasdaq +67), US 10Y 2.88% (+2bps). Positive news on trade as China considering cutting tariffs on US made cars. Little reaction to stronger PPI data in the US – with the core +0.3% vs 0.1% exp – the BLS noting that services prices were boosted by higher margins at fuel retailers. Core Euro bonds also lower, Gilts underperforming as UK PM May set to meet EU Juncker to discuss possible changes to current Brexit deal. GOCs lower, in line with tsys, 10Y 2.07% (+1bp). Provis ended yest unch after widening at first, as equities rebounded in the after.
News headlines
Huawei Judge Debates Apt Bail for Chinese Billionaire’s Daughter (Bloomberg) A Canadian judge said Monday he wasn’t satisfied with a bail proposal from the lawyers for jailed Huawei Technologies Co. Chief Financial Officer Meng Wanzhou, who faces a U.S. extradition request. Justice William Ehrcke of the British Columbia Supreme Court voiced doubts that Meng’s husband, Liu Xiaozong, could act as her « surety » — that is, a type of guarantor or “community jailer » who would be responsible for ensuring she meets bail terms and who would lose a proposed C$15 million in cash and properties if she were to violate conditions.
Cohen Said Russian Vowed ‘Political Synergy’ for Trump in 2015 (Bloomberg) Michael Cohen spoke with a Russian national who repeatedly proposed a meeting between Donald Trump and Russian President Vladimir Putin in the early months of Trump’s presidential bid, and offered “political synergy” for the campaign, according to a filing by Special Counsel Robert Mueller’s office. Trump tweeted early Saturday that there had been “NO COLLUSION!”
China Moves on U.S. Car Tariff Cut Trump Tweeted About (Bloomberg) China is moving toward cutting its trade-war tariffs on imported U.S.-made cars, a step already brandished by President Donald Trump as a concession won during trade talks in Argentina. A proposal to reduce tariffs on cars made in the U.S. to 15 percent from the current 40 percent has been submitted to China’s Cabinet to be reviewed in the coming days, according to people familiar with the matter. Shares of carmakers including BMW AG, Ford Motor Co. and Tesla Inc. rose on the news.
U.S. Futures, European Stocks Rally as Bonds Drop: Markets Wrap (Bloomberg) U.S. equity futures and European stocks rallied while Asian shares slipped as investors weighed the prospects for success in American-Chinese trade talks. The pound rebounded. Futures on the Dow Jones, S&P 500 and Nasdaq indexes all jumped, shrugging off losses in the Asian benchmark after China was said to move toward cutting tariffs on American-manufactured cars. Miners and carmakers advanced, helping the Stoxx Europe 600 Index extend gains. The pound rallied, trimming some of its tumble from a day earlier. The dollar weakened while Treasuries and European sovereign bonds fell.
Court rejects Nissan ex-chairman Ghosn’s appeal to end detention (Reuters) A Tokyo court on Tuesday rejected ousted Nissan Motor chairman Carlos Ghosn’s appeal to end his detention following his arrest last month on allegations of financial misconduct. Ghosn has been held in a Tokyo jail since he was arrested on Nov. 19 on suspicion of conspiring to understate his pay by about half of the actual 10 billion yen ($88 million) awarded over five years from 2010. He was officially charged on Monday.
Hyundai Motor’s two R&D vice chairmen offer to resign (Reuters) Hyundai Motor Group’s two vice chairmen in charge of research and development (R&D) have offered to resign, three people familiar with the matter told Reuters on Tuesday. R&D president Albert Biermann is likely to be named the new head of the division, two of them added, declining to be named as they are not authorized to speak to media. Hyundai is battling a plunge in sales, profits and its share price, and the reshuffle would be the latest since it promoted Euisun Chung in September to executive vice chairman, moving him closer to succeeding his octogenarian father as head of South Korea’s second-largest group.
Huawei fallout hits Canada Goose shares while China rival soars (BNN) Escalating tensions between China and Canada triggered by the arrest of Huawei Technologies Co.’s finance chief is having a dramatic impact on two of the world’s hottest apparel stocks. Canada Goose Holdings Inc. (), the trendy maker of premium parkas, has tumbled almost 20 per cent over the past four days. At the same time, Bosideng International Holdings Ltd., a Hong Kong-based downy apparel maker, has jumped nearly 13 per cent to a five-year high.
Overnight markets
Overview: US 10yr note futures are down -0.22% at 120-13, S&P 500 futures are up 0.86% at 2665.75, Crude oil futures are up 1.16% at $51.59, Gold futures are up 0.17% at $1251.5, DXY is down -0.23% at 96.998, CAD/USD is down -0.13% at 0.7474.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.036% | 2 Year | 2.752% |
| 5 Year | 2.037% | 5 Year | 2.746% |
| 10 Year | 2.087% | 10 Year | 2.886% |
| 30 Year | 2.237% | 30 Year | 3.145% |
US Economic Data
| 6:00 AM | NFIB Small Business Optimism, Nov 104.8 est 107.0 (107.4 prior) |
| 8:30 AM | PPI Final Demand MoM, Nov est 0.0% (0.6% prior) |
| PPI Ex Food and Energy MoM, Nov est 0.1% (0.5% prior) | |
| PPI Ex Food, Energy, Trade MoM, Nov est 0.2% (0.2% prior) | |
| PPI Final Demand YoY, Nov est 2.5% (2.9% prior) | |
| PPI Ex Food and Energy YoY, Nov est 2.5% (2.6% prior) | |
| PPI Ex Food, Energy, Trade YoY, Nov (2.8% prior) |
Canadian Economic Data
There is no Canadian economic data for today. =
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
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230