Market Update
Tsys trading slightly weaker, yields ~0.5-1bp higher US 10Y 2.38%, light volume in TY futures (~250k). Thirty year auction in the US, FOMC decision tommorow aft. Core Euro govts lower on stronger UK inflation data after CPI rose to the highest level in five and a half years in Nov. GOCs weaker after stronger US PPI, spds 1-2bps wider vs tsys. Provis unch, Ont 48s 69.5/69, Ont 27s 60/5, longs continue to outperform on extension flows.
News headlines
Carney to Put Pen to Paper as U.K. Inflation Climbs Above 3% (Bloomberg) U.K. inflation unexpectedly accelerated to the fastest in more than 5 1/2 years in November, which will force Bank of England Governor Mark Carney to explain why price growth is so far above his policy target.
Crack in U.K. Oil Pipe Roils Crude Trading From U.S. to Asia (Bloomberg) The effects of a hairline crack in one of the world’s most important oil conduits is rippling through crude markets from Europe to the U.S. and Asia.
Moore, Jones Expose Rural-Urban Divide That Defines Alabama Race (Bloomberg) Democrat Doug Jones and Republican Roy Moore made their election eve pitches to Alabama voters in settings that evoked the cultural and political divide that’s come to define the two parties in modern America.
Atos Bids $5.1 Billion for Gemalto to Create French Tech Giant (Bloomberg) Atos SE made a 4.3-billion-euro ($5.06 billion) unsolicited bid for Gemalto NV with the backing of the French state’s investment bank, seeking to create a European leader in cybersecurity, digital technologies and payment services.
Stocks Push Higher as Oil Rises; Dollar Slips: Markets Wrap (Bloomberg) Stocks in Europe gained, while the dollar slipped and Treasuries steadied as the week’s central-bank meetings remained the focus for market participants.
Bond Traders Look to 2018 as This Week’s Fed Raise Seen as Done Deal (Bloomberg) With a Federal Reserve rate hike this week seen as a done deal, the best chance for bond-market volatility may lie in policy makers’ updated outlook for the pace of future tightening.
Canada beefing up housing data as policy pushes ahead (Reuters) Fresh data on foreign investment in Toronto and Vancouver, Canada’s largest cities, will be released next week in a move economists hope will shed light on what is driving demand – and a potential bubble – in the country’s housing market.
Canada, provinces end dispute on how to split pot tax revenues (Reuters) The Canadian government and the country’s 10 provinces on Monday settled a disagreement on how to split the revenues from a proposed federal tax on marijuana sales once the narcotic drug is legalized next July, Finance Minister Bill Morneau said.
Overnight markets
Overview: US 10yr note futures are down -0.038% at 124-07, S&P 500 futures are up 0.08% at 2666.75, Crude oil futures are up 0.9% at $58.51, Gold futures are down -0.14% at $1245.1, DXY is up 0.01% at 93.872, CAD/USD is down -0.19% at 0.7793.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.525% | 2 Year | 1.835% |
| 5 Year | 1.689% | 5 Year | 2.167% |
| 10 Year | 1.882% | 10 Year | 2.394% |
| 30 Year | 2.175% | 30 Year | 2.779% |
US Economic Data
| 6:00 AM | NFIB Small Business Optimism, Nov 107.5 est 104.0 (103.8 prior) |
| 8:30 AM | PPI Final Demand MoM, Nov 0.4% est 0.3% (0.4% prior) |
| PPI Ex Food, Energy, Trade MoM, Nov 0.4% est 0.2% (0.2% prior) | |
| PPI Ex Food and Energy MoM, Nov 0.4% est 0.2% (0.4% prior) | |
| PPI Final Demand YoY, Nov 3.1% est 2.9% (2.8% prior) | |
| PPI Ex Food and Energy YoY, Nov 2.4% est 2.4% (2.4% prior) | |
| PPI Ex Food, Energy, Trade YoY, Nov 2.4% (2.3% prior) | |
| 14:00 PM | Monthly Budget Statement, Nov est -134.5b (-136.7b 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