cti2015header-morning comments web

Market Update

US  tsys trading much lower, the slide continuing for a 4th day following Trump’s election. The current 10Y at 2.24% is 9bps higher on the day & ~55bps higher since Wed morning. The USD surging to an 11-month high, core Euro bonds lagging the selloff in tsys – the bund/tsy 10Y spd new low 188bps. BOJ Kuroda sounding optimistic saying the economy is showing momentum and that inflation will hit 2% earlier than under any BOJ governor. In Canada, GOC yields are higher, yields 8-10 bps higher , the GOC 10Y 1.55%, a high since late April. Provis opening ~1bp tighter from Friday, supply unlikely given volatility in bond markets.

News headlines 

Bonds Bloodied as Trump Spending Plans Spur Dollar, Copper Gains (Bloomberg) Routs in global bonds and emerging markets intensified, while the dollar climbed with base metals as investors positioned for the wave of fiscal stimulus that Donald Trump has pledged to unleash. The yield on 30-year Treasuries rose above 3 percent for the first time since January, with last week’s record debt selloff bleeding into Monday trading and weighing on credit markets. The Bloomberg Dollar Spot Index advanced to the highest since February as the U.S. currency strengthened versus almost all its major counterparts. European shares pared earlier gains and stocks in developing nations sank to a four-month low. Copper headed for the highest close in 16-months and oil fell with gold.

Oil pinned near three-month lows as gloom grows over OPEC (Reuters) Oil fell to its lowest in three months on Monday, as the prospect of another year of oversupply and weak prices overshadowed chances that OPEC will reach a deal to cut output. Donald Trump’s surprise victory in last week’s U.S. presidential election has boosted stocks and the dollar, but undermined much of the commodities complex, including oil, which has sagged as expectations that the world’s largest exporters will agree to reduce output this month have waned.

In phone call, China’s Xi tells Trump cooperation is only choice (Reuters) Chinese President Xi Jinping told U.S. President-elect Donald Trump that cooperation was the only choice for relations between the world’s two largest economies, with Trump saying the two had established a « clear sense of mutual respect ». There has been intense speculation over the impact of Trump’s win on issues facing the two countries, from global trade and climate change to the security balance in the Asia-Pacific.

Trudeau Clears Path for Canada to Approve Kinder Morgan Pipeline (Bloomberg) Prime Minister Justin Trudeau has set the table for Canada to approve Kinder Morgan Inc.’s Trans Mountain pipeline expansion by announcing environmental measures aimed at placating opposition to the project. Trudeau unveiled a national carbon price in October, and over the past few weeks has pumped billions into marine protection and “green” infrastructure, as well as begun an overhaul of the federal energy regulator and granted crown protection to a rainforest that essentially blocks a rival proposal. He regularly says it’s his job to get Canada’s resources to market while balancing the environment and economy.

Former Amaya Inc CEO David Baazov offers to buy online gambling company for $3.48 billion (Financial Post) The former chief executive of Amaya Inc, David Baazov, has offered to buy the Canadian online gambling company in a deal valued at about $3.48 billion. The offer price of $24 per share represents a premium of 30.9 per cent to Amaya’s Friday close of $18.34.

Ottawa to make ‘unprecedented’ appeal for private investment in infrastructure (GlobeAndMail) Like a high-stakes episode of Dragons’ Den, Prime Minister Justin Trudeau and some of his senior cabinet ministers will spend the day behind closed doors at Toronto’s Shangri-La hotel, pitching investors on why they should park their billions in Canada.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.2457% at 126-28, S&P 500 futures are up 0.31% at 2168.25, Crude oil futures are down -1.59% at $42.72, Gold futures are down -0.13% at $1222.7, DXY is up 0.67% at 99.727, CAD/USD is up 0.04% at 0.7383.

US Economic Data 

There is no major economic data for today.

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