Market Update
Tsys higher on risk-off tied to US-China trade, heavy volume in TY futures (600k), 10Y 1.845 (-4bps), tsy curve bull flattening for a 2nd day, prices off session highs after China report it will allow imports of poultry from the US. Core Euro bonds higher, lagging the rally in tsys by 2-3bps. Powell scheduled for 10ET in front of House Budget Committee, other Fed speakers as well. GOCs higher, in line with tsys, 10Y 1.51 (-4bps). Long Canada 2051 auction at noon.
News headlines
Stocks Struggle Amid Trade News, Mixed Growth Data: Markets Wrap (Bloomberg) U.S. equity-index futures edged lower with stocks in Europe and shares were mixed in Asia as investors digested the latest economic data and trade developments. Treasuries and most government bonds advanced.
TSX futures tick up on higher oil prices (Reuters) Futures for Canada’s main stock index edged up on Thursday, buoyed by gains in oil prices following a surprise drop in U.S. crude inventories and OPEC’s comment about lower-than-expected U.S. shale production in 2020.
Oil Rises on Signs of U.S. Supply Drop, OPEC’s Shale Outlook (Bloomberg) Oil rose for a second day after an industry report pointed to a drop in U.S. inventories, and as OPEC said it sees potential for a “sharp” slowdown in American shale output next year.
China’s economy continues to slow on weak investment and demand (BNN) The engines of China’s economy are spluttering, with exports falling, factory output slowing, investment growth at a record low and consumption coming off the boil.
China says holding ‘in-depth’ talks with U.S. on interim trade deal (Reuters) China and the United States are holding “in-depth” discussions on a first phase trade agreement, and cancelling tariffs is an important condition to reaching a deal, the Chinese commerce ministry said on Thursday.
ECB rates close to bottoming out, hike would be a mistake: Villeroy (Reuters) European Central Bank interest rates are close to bottoming out but low rates must stay and raising them now, as advocated by some, would be a mistake, French central bank Governor Francois Villeroy de Galhau said on Thursday.
Germany dodges recession with unexpected third-quarter growth (BNN) Germany narrowly dodged what would have been its first recession in six years, putting a damper on speculation that the government will add fiscal stimulus any time soon.
Lebanon bank staff to strike until security plan agreed: union (Reuters) Lebanon’s bank staff union called on Thursday for employees to stay on strike until it receives details of a security plan, especially on how to deal with customers.
Market Overview: US 10yr note futures are up 0.133% at 129-02, S&P 500 futures are down -0.15% at 3090.75, Crude oil futures are up 0.86% at $57.61, Gold futures are up 0.33% at $1468.1, DXY is up 0.01% at 98.381, CAD/USD is up 0.12% at 0.7537.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.547% | 2 Year | 1.616% |
| 5 Year | 1.505% | 5 Year | 1.657% |
| 10 Year | 1.513% | 10 Year | 1.845% |
| 30 Year | 1.67% | 30 Year | 2.32% |
US Economic Data
| 08:30 AM | PPI Final Demand MoM, Oct Survey: 0.30% Prior: -0.30% |
| PPI Ex Food and Energy MoM, Oct Survey: 0.20% Prior: -0.30% | |
| PPI Final Demand YoY, Oct Survey: 0.90% Prior: 1.40% | |
| PPI Ex Food and Energy YoY, Oct Survey: 1.50% Prior: 2.00% | |
| Initial Jobless Claims, Nov 9 Survey: 215k Prior: 211k | |
| Continuing Claims, Nov 2 Survey: 1683k Prior: 1689k | |
| 09:45 AM | Bloomberg Consumer Comfort, Nov 10 Survey: — Prior: 59.1 |
| 11:00 AM | DOE U.S. Crude Oil Inventories, Nov 8 Survey: 1500k Prior: 7929k |
| DOE U.S. Gasoline Inventories, Nov Survey: -1250k Prior: -2828k |
Canadian Economic Data
| 08:30 AM | New Housing Price Index MoM, Sep Survey: 0.10% Prior: 0.10% |
| New Housing Price Index YoY, Sep Survey: -0.20% Prior: -0.30% |
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