Market Update
US tsy yields 2-3bps higher, 10Y 1.835% (+1.5bps), on avg volume in TY futures (350k), risk on tone with US Commerce sec Ross saying a US-China trade deal will be reached ‘in all likelihood’, while Kudlow said deal is ‘coming down to short strokes’. Equity futures higher (S&P +7.5), crude -0.30%, the USD index unch. US October retail sales on tap, expected to have rebounded to 0.2% from -0.3% in Sep, due primarily to an ~8% increase in gas prices which were flat the previous month . GOCs lower and 1bp wider vs tsys, 10Y 1.485% (+2.5bps). Poloz speech last night notable as he referred to the strong growth in wages, above 4.0%, seeming to attribute more significance from the strong labor market data than GDP.
News headlines
U.S. Stock Futures Edge Higher, Treasuries Decline: Markets Wrap (Bloomberg) U.S. equity-index futures climbed with Asian stocks after a senior American official signaled progress on a trade deal between the world’s two largest economies. European shares erased gains and Treasuries slipped.
TSX futures down on lower oil prices (Reuters) Futures for Canada’s main stock index were lower on Friday, pressured by a drop in oil prices over concerns of rising supplies next year.
Oil Heads for Weekly Loss on Signs of Adequate Global Supplies (Bloomberg) Oil headed for a weekly decline as rising U.S. crude inventories and new production elsewhere signaled that global markets will remain comfortably supplied.
Automakers around world await Trump tariff decision (Reuters) Automakers around the world are awaiting a decision from U.S. President Donald Trump on whether he will impose up to 25% tariffs on U.S. car and auto part imports after a 180-day review period elapsed this week.
U.S., China trade talks to continue Friday: U.S. commerce chief (Reuters) U.S.-China trade talks are set to continue with a telephone call on Friday as both sides seek to hammer out a phase one trade pact, U.S. Commerce Secretary Wilbur Ross said, adding that progress was being made on the agreement’s details.
Kudlow says phase one China deal down to the ‘short strokes’ (BNN) White House economic adviser Larry Kudlow said negotiations over the first phase of a trade agreement with China were coming down to the final stages, with the two sides in close contact.
Bank of Canada governor says technological change may call for neutral policy (Reuters) The widespread adoption of artificial intelligence, machine learning and other new technologies may be boosting potential output in ways that could take years to show up in the data, Bank of Canada Governor Stephen Poloz said on Thursday.
Hong Kong expects first annual recession since financial crisis (BNN) Hong Kong revised down its estimate for economic growth this year as political unrest grips the city, with the government now forecasting the first annual contraction since the global financial crisis a decade ago.
U.S. trade groups raise alarm over Canadian digital services tax (Reuters) More than a dozen U.S. trade groups and the U.S. Chamber of Commerce on Friday urged the Trump administration to block a French-style digital services tax proposed by Canadian Prime Minister Justin Trudeau during October’s election.
Market Overview: US 10yr note futures are down -0.169% at 129-04, S&P 500 futures are up 0.23% at 3104.25, Crude oil futures are down -0.21% at $56.65, Gold futures are down -0.51% at $1465.9, DXY is down -0.04% at 98.12, CAD/USD is down -0.07% at 0.7552.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.545% | 2 Year | 1.612% |
| 5 Year | 1.495% | 5 Year | 1.65% |
| 10 Year | 1.496% | 10 Year | 1.839% |
| 30 Year | 1.641% | 30 Year | 2.317% |
US Economic Data
| 08:30 AM | Empire Manufacturing, Nov Survey: 6.0 Prior: 4.0 |
| Import Price Index MoM, Oct Survey: -0.20% Prior: 0.20% | |
| Import Price Index YoY, Oct Survey: -2.20% Prior: -1.60% | |
| Export Price Index MoM, Oct Survey: -0.10% Prior: -0.20% | |
| Export Price Index YoY, Oct Survey: — Prior: -1.60% | |
| Retail Sales Advance MoM, Oct Survey: 0.20% Prior: -0.30% | |
| Retail Sales Ex Auto MoM, Oct Survey: 0.40% Prior: -0.10% | |
| Retail Sales Ex Auto and Gas, Oct Survey: 0.30% Prior: 0.00% | |
| 09:15 AM | Industrial Production MoM, Oct Survey: -0.40% Prior: -0.40% |
| Capacity Utilization, Oct Survey: 77.00% Prior: 77.50% | |
| 10:00 AM | Business Inventories, Sep Survey: 0.10% Prior: 0.00% |
Canadian Economic Data
| 08:30 AM | Int’l Securities Transactions, Sep Survey: — Prior: 4.99b |
| 09:00 AM | Existing Home Sales MoM, Oct Survey: 1.30% Prior: 0.60% |
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