Market Update
Tsys weakening before CPI , lows of overnight range, yields 1.2-2bps higher, 10Y 2.42 (+2bps). Brief bid on democrat win in Alabama senate race evaporated the rest of the session. CPI coming up and FOMC meeting later this aft with the Fed expected to hike rates , but focus on new dotplots and final Yellen press conference. Core Euro bonds lower, led by 10Y bunds, spking lower with gilts ~5:30 after mixed UK labor data – rise in AWE yet weaker employment, which could lead to higher gilt issuance on lower tax receipts. GOCs weaker in line with tsys, 10Y 1.895%. CMB 5 yr pricing this morning in the area of 32bps- mkt has improved 31.5/31 (32/31.5 yest). 10Y provi supply possible from Ont and Newf.
News headlines
Fed 2018 Dots in Focus for Yellen Swan Song: Decision Day Guide (Bloomberg) As investors await 2018 direction from Federal Reserve chairman nominee Jerome Powell, they will get one last chance to hear Janet Yellen’s take on the U.S. economy.
Democrat Doug Jones Defeats GOP’s Roy Moore in Alabama Senate Race (Bloomberg) Democrat Doug Jones delivered a stunning upset defeat to Republican Roy Moore in a U.S. Senate race in deep-red Alabama that had split the GOP even before its controversial nominee was accused of inappropriate conduct with teenage girls.
U.K. Loses Most Jobs Since 2015 as Labor Market Shows Strain (Bloomberg) Britain shed jobs at the fastest pace in almost 2 1/2 years between August and October in a sign that the labor market is slowing.
Stocks Struggle Ahead of Fed Meeting; Bonds Fall: Markets Wrap (Bloomberg) Stocks in Europe struggled to match Asian gains as investors awaited policy decisions by central banks on the continent and in America. Most European bonds followed Treasuries lower as the dollar retreated.
Investor Bet on Middle East Oil Play Pays Off in Abu Dhabi IPO (Bloomberg) Investors who bet on exposure to Middle East oil got it right, at least on the first trading day of shares in a unit of Abu Dhabi’s oil giant.
Canada’s CIBC plans U.S. listing of $2 billion Caribbean unit (Reuters) Canadian Imperial Bank of Commerce CM.TO plans to list its $2 billion Caribbean unit, FirstCaribbean, in New York, enabling it to exit a region where earnings growth has been slow, three people familiar with the matter told Reuters this week.
West Face files claim against mortgage lender Home Capital (Financial Post) Alternative asset manager West Face Capital Inc. has formally filed a lawsuit against Home Capital Group Inc. and three former executives, seeking $70 million in damages over claims the mortgage lender’s public disclosure was “inaccurate, incomplete and misleading.”
Overnight markets
Overview: US 10yr note futures are down -0.176% at 123-29, S&P 500 futures are down 0% at 2667.75, Crude oil futures are up 0.93% at $57.67, Gold futures are up 0.15% at $1243.6, DXY is down -0.07% at 94.039, CAD/USD is down -0.05% at 0.7777.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.54% | 2 Year | 1.848% |
| 5 Year | 1.704% | 5 Year | 2.197% |
| 10 Year | 1.893% | 10 Year | 2.425% |
| 30 Year | 2.187% | 30 Year | 2.796% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Dec 8th -2.3% (4.7% prior) |
| 8:30 AM | CPI MoM, Nov est 0.4% (0.1% prior) |
| CPI Ex Food and Energy MoM, Nov est 0.2% (0.2% prior) | |
| CPI YoY, Nov est 2.2% (2.0% prior) | |
| CPI Ex Food and Energy YoY, est 1.8% (1.8% prior) | |
| CPI Core Index SA, Nov est 253.932 (253.428 prior) | |
| CPI Index NSA, Nov est 246.816 (246.663 prior) | |
| Real Avg Weekly Earnings YoY, Nov (0.4% prior) | |
| Real Avg Hourly Earnings YoY, Nov (0.4% prior) | |
| 14 :00 PM | FOMC Rate Decision (Upper Bound), Dec 13th est 1.50% (1.25% prior) |
| FOMC Rate Decision (Lower Bound), Dec 13th est 1.25% (1.00% prior) |
Canadian Economic Data
| 8:30 AM | Teranet/National Bank HPI MoM, Nov (-1.0% prior) |
| Teranet/National Bank HPI YoY, Nov (10.0% prior) | |
| Teranet/National Bank HP Index, Nov (218.13 prior) |
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