cti2015header-morning comments web

Market Update

UK Gilts are trading mixed with 10-year part of the yield curve leading the underperformance weighed by continued concerns over a Donald Trump administration and the likely impact on growth and inflation in both the US and UK. UK construction output surprised to the upside, rising 0.3% in September, while Augusts number was revised up to -1.1% from -1.5%. This lead to construction falling 1.1$ in Q3, less than the 1.4% pencilled in for the preliminary GDP estimate, however the change will not have any impact on growth

News headlines 

 S&P 500 Futures Fall as Trump Policies in Focus; Apple Retreats (Bloomberg) U.S. stock-index futures fell, indicating the S&P 500 Index will halt a four-day winning streak, as investors continue to parse the implications of a Donald Trump presidency for the economy and interest rates. S&P 500 Index contracts expiring in December slid 0.6 percent to 2,154.25 at 6:35 a.m. in New York. The equity benchmark capped its longest winning streak since July yesterday, as financial companies extended gains, although progress was tempered by losses in technology and some defensive stocks. Bucking the trend, the Nasdaq 100 Index dropped the most since September.

Trump’s Transition Team Pledges to Dismantle Dodd-Frank Act (Bloomberg) President-elect Donald Trump is translating some of his populist campaign rhetoric into policy statements, including the contention that the Dodd-Frank Act should be scrapped because it has made Wall Street banks an even bigger threat to the nation’s economy and working families.

OPEC points to even bigger 2017 oil surplus as its output jumps (Reuters) OPEC reported an increase in its oil production in October to a record high led by members hoping to be exempt from the producer group’s attempt to curb supply, pointing to an even larger global surplus next year. The Organization of the Petroleum Exporting Countries pumped 33.64 million barrels per day (bpd) last month, according to figures OPEC collects from secondary sources, up 240,000 bpd from September, OPEC said in a monthly report.

Euro Heads for Worst Week in a Year on Increased Political Risks (Bloomberg) The euro headed for its worst week in a year as Donald Trump’s win in the U.S. presidential race stirred up investor concern over populist outcomes in European votes. Markets in the euro region potentially have turbulent period ahead with an Italian constitutional referendum in December and elections in France, Germany and the Netherlands next year that may kick out ruling parties or coalitions and overturn economic policies.

EU agrees to extend border controls inside Schengen zone (Reuters) The European Union agreed on Friday to extend temporary border controls inside the bloc’s free-travel zone for another three months to help cope with the migration crisis. Last month, the European Commission, which proposes legislation, recommended that Austria, Denmark, Germany, Sweden and non-EU Norway be allowed to continue carrying out border checks beyond Nov. 15, when the checks were due to end.

Alibaba Singles’ Day sales pass 2015 total, but growth rate slows (Reuters) Alibaba Group Holding Ltd’s (BABA.N) Singles’ Day sales surged past last year’s 91.2 billion yuan ($13.36 billion) total with nearly nine hours left on the clock, but growth was markedly slower than in 2015 as shoppers sought even bigger price cuts.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.2563% at 127-23, S&P 500 futures are up 0.43% at 2169.5, Crude oil futures are down -0.93% at $44.85, Gold futures are up 0.45% at $1279.2, DXY is up 0.34% at 98.843, CAD/USD is up 0.35% at 0.7423.

US Economic Data 

11:00 AM University of Michigan, Nov P,  est. 87.9 (prior 87.2)

Canadian Economic Data 

There is no major 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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