cti2015header-morning comments web

Market Update

Tsys sharply lower after overnite spike in oil on new OPEC cuts, yet so far 2.50% bringing in buyers, tied to selling of yen according to MNI. Overnite the 10Y hit 2.525% in Tokyo as Saudi agreed to cut more oil and non OPEC members are ready to sign on as well. JGB curve ~8bps steeper, long yields highest since March on BOJ taper rumours. GOCs lower actually underperforming in the pullback, GOC 10Y above 1.75% curve 2bps steeper. Provis starting well bid after ending the week unch.  Supply still likely before the holidays.

News headlines 

Crude Soars as Output Deal Weighs on Bonds; China Shares Tumble (Bloomberg) Crude oil surged to the highest in 17 months amid efforts to cut production, pushing up the outlook for global inflation and sending 10-year Treasury yields above 2.5 percent for the first time since October 2014. Chinese equities tumbled. Oil jumped about 4 percent in New York and London after Saudi Arabia signaled it will cut output by more than previously agreed amid a weekend deal to tackle oversupply with competitors such as Russia. Longer-dated securities led declines as government bonds around the world tumbled, while climbing energy shares bucked a drop in Europe’s wider benchmark stock gauge. China’s Shanghai Composite Index sank the most since June as a gauge of smaller companies in Shenzhen plunged more than 5 percent.

Japan October core machinery orders rise, beating expectations (Reuters) Japan’s October core machinery orders rose for the first time in three months to beat expectations, government data showed – a tentative sign of a pickup in capital expenditure. Core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, rose 4.1 percent in October from the previous month, Cabinet office data showed on Monday. The results handily beat the economists’ median estimate of a 1.0 percent increase.

Asian banks provide 800 mln euros in loans to Russia’s Gazprom (Reuters) Japan’s Mizuho Bank, Sumitomo Mitsui Banking Corp and JPMorgan Chase & Co have provided 800 million euros ($848 million) in loans to Gazprom, the Russian gas giant said in a statement on Monday.

Merkel, Tsipras to discuss Greek financial situation December 16 (Reuters) German Chancellor Angela Merkel will hold talks with Greek Prime Minister Alexis Tsipras in Berlin on Friday, one day after a summit of European Union leaders in Brussels, a government spokeswoman said on Monday.

Canadian oil producers hope to OPEC-proof their higher spending plans for next year (Financial Post) Following an extremely challenging two years of persistently low oil prices, Canadian energy companies are beginning to increase spending again, though executives don’t expect a dramatic rebound in crude prices.

Quebec Paves Way for Oil, Gas Exploration With New Energy Plan (Bloomberg) Quebec’s legislature passed a bill that will pave the way for more oil and gas exploration, providing a boost to drillers such as Junex Inc. while drawing criticism from environmental, aboriginal and citizen groups.

Overnight markets

Overview: US 10yr note futures are down -0.1512% at 123-27, S&P 500 futures are down -0.01% at 2254.5, Crude oil futures are up 4.19% at $53.66, Gold futures are up 0.06% at $1162.6, DXY is down -0.45% at 101.13, CAD/USD is down -0.39% at 0.7618.

US Economic Data 

10:00 AM Bloomberg Nanos Confidence, Dec 9th, (prior 55.6)
2:00 PM Monthly Budget Statement, Nov, est. -130.0b (prior -44.2b)

Canadian Economic Data

There is no major economic news 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