Market Update
US tsys trading higher, curve flatter, 10Y 1.83% (-1.5bps), avg volume in TY futures before Nov CPI (0.2%/2.0% y/y exp) and FOMC this afternoon.. Earlier equity weakness has reversed with S&P futures +3.0. EGBs also pulling back after earlier strength as equities rebound. Gilts outperforming and GBP taking leg lower after latest YouGov poll shows narrower lead for Conservatives, who are still expected to form a majority. GOCs unch before CAP Util. data at 8:30. 5Y CMB expected to launch this morning , reopening of Dec 2024s (27/26 on screen).
News headlines
U.S. Futures Fluctuate Before Fed; Bonds Advance: Markets Wrap (Bloomberg) U.S. equity futures fluctuated with stocks before the Federal Reserve’s final policy decision of the year and amid lingering uncertainty over the progress of trade negotiations between America and China. Treasuries advanced.
TSX futures inch higher as gold prices rise (Reuters) Canada’s main stock index futures edged up on Wednesday, boosted by higher gold prices as investors hedged against uncertainties around threats of new U.S. tariffs on Chinese goods.
Oil Falls From 12-Week High as Report Shows U.S. Stockpile Build (Bloomberg) Oil retreated from its highest close in almost three months after an industry report showed American crude inventories expanded last week, adding to signs that supplies will remain abundant next year.
Canada, Mexico, U.S. sign changes to new NAFTA (BNN) House Democrats embraced the U.S.-Mexico-Canada trade agreement after securing key revisions and announced plans to vote on the deal next week, putting President Donald Trump closer to a political win as he heads into the 2020 election.
Mexican businesses want clarity on details of USMCA trade deal (Reuters) After the initial euphoria had subsided, Mexican business leaders emerged bruised and resigned to a new stricter trade deal with the United States and Canada that could usher in more intrusive enforcement of labor rules in Mexico.
Focus squarely on Trump as Dec 15 tariffs loom in US-China trade war (Reuters) U.S. President Donald Trump has days to decide whether to impose tariffs on nearly $160 billion in Chinese consumer goods just weeks before Christmas, a move that could be unwelcome in both the United States and China.
Aramco IPO to help Saudi economy shift from oil: finance minister (Reuters) Saudi Aramco’s listing will boost the kingdom’s efforts to diversify from oil as the bulk of proceeds will be injected in domestic projects, while the global buzz surrounding the deal will help lure foreign capital, the finance minister said.
Exclusive: U.S. Army will fund rare earths plant for weapons development (Reuters) The U.S. Army plans to fund construction of rare earths processing facilities, part of an urgent push by Washington to secure domestic supply of the minerals used to make military weapons and electronics, according to a government document seen by Reuters.
What’s at stake for Britain’s economy in election? (Reuters) The two main parties in Britain’s election on Thursday offer contrasting plans on spending, tax, the role of the state, trade unions and Brexit.
Market Overview: US 10yr note futures are up 0.012% at 128-30, S&P 500 futures are up 0.1% at 3139, Crude oil futures are down -0.54% at $58.92, Gold futures are up 0.14% at $1470.2, DXY is up 0.15% at 97.559, CAD/USD is up 0.07% at 0.7554.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.668% | 2 Year | 1.646% |
| 5 Year | 1.613% | 5 Year | 1.678% |
| 10 Year | 1.599% | 10 Year | 1.828% |
| 30 Year | 1.701% | 30 Year | 2.249% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, Dec 6 Survey: — Actual: 3.80% Prior: -9.20% |
| 08:30 AM | CPI MoM, Nov Survey: 0.20% Prior: 0.40% |
| CPI Ex Food and Energy MoM, Nov Survey: 0.20% Prior: 0.20% | |
| CPI YoY, Nov Survey: 2.00% Prior: 1.80% | |
| CPI Ex Food and Energy YoY, Nov Survey: 2.30% Prior: 2.30% | |
| CPI Core Index SA, Nov Survey: 265.476 Prior: 265.011 | |
| CPI Index NSA, Nov Survey: 257.213 Prior: 257.346 | |
| Real Avg Weekly Earnings YoY, Nov Survey: — Prior: 0.90% | |
| Real Avg Hourly Earning YoY, Nov Survey: — Prior: 1.20% | |
| 02:00 PM | FOMC Rate Decision (Upper Bound), Dec 11 Survey: 1.75% Prior: 1.75% |
| FOMC Rate Decision (Lower Bound), Dec 11 Survey: 1.50% Prior: 1.50% | |
| Interest Rate on Excess Reserves, Dec 12 Survey: 1.55% Prior: 1.55% | |
| Monthly Budget Statement, Nov Survey: -$206.2b Prior: -$100.5b |
Canadian Economic Data
| 08:30 AM | Capacity Utilization Rate, 3Q Survey: 82.10% Prior: 83.30% |
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