Market Update
US tsys trading slightly higher on below avg volume (300k TY futures), 10Y 1.77%. Phili Fed Survey and Dec Retail Sales coming up, along with NAHB survey and Long-term TICS flows this aft. Core EGBs higher, 10Y gilts/bunds 2bps lower while 2Y gilt yields have collapsed 20bps just this week with market pricing in a cut at this month’s BOE meeting. US equity futures higher – S&P/Nasdaq +0.40%, crude unch. Morgan Stanley +3.5% pre-mkt after huge Q4 eps beat $1.30 vs $0.99. GOCs lagging tsys by 1.5bps in the long end, ADP payrolls due at 8:30. Yesterday BMO was first out of the gate issuing $1.5bln in 5Y bail-in debt at 82, 3x oversubscribed.
News headlines
Futures near record on trade deal, robust earnings (Reuters) U.S. stock index futures hovered near all-time highs on Thursday on optimism over an initial U.S.-China trade deal and a positive start to the fourth-quarter earnings season.
Investors see smoother path for U.S. stocks as Warren’s election odds slip (Reuters) Traders are less worried about political uncertainty in the run-up to the U.S. presidential election, with former Vice President Joe Biden remaining strong in the polls while Senator Elizabeth Warren has lost ground.
ECB takes more upbeat view in December meetings: accounts (Reuters) European Central Bank policymakers took a more upbeat view on economic developments in their December 12 meeting but continued to see an abundance of risk that warrant ultra-easy policies, the accounts of the meeting showed on Thursday.
EU says will assess if US-China deal meets global trade rules (FP) The European Union’s trade chief said on Thursday that the bloc would check to see if a major trade deal struck by the United States and China is compliant with global rules.
China says trade deal good for all, media discourages ‘nitpicking’ (Reuters) Chinese state media on Thursday warned against any “nitpicking” as Beijing portrayed the Phase 1 trade deal with United States and its new commitments to massive purchases of American goods as a boon for China’s economy.
Trade deal no panacea for rocky U.S. relations with China (Reuters) From Huawei to the South China Sea, deep political rifts between Beijing and Washington are set to persist, despite a trade relations breakthrough, as the United States pushes back against an increasingly powerful and assertive China.
TSX futures climb as U.S.- China sign trade deal (Reuters) Canada’s main stock index futures rose on Thursday as the U.S. and China signed their Phase 1 trade deal, relieving market jitters after the 18-month trade conflict.
BNY Mellon profit surges 67% on one-time gain (Reuters) Bank of New York Mellon Corp (BK.N), the world’s largest custodian bank, reported a 67% jump in quarterly profit on Thursday, helped by a one-time gain from the sale of an unspecified equity investment.
Morgan Stanley beats profit estimates as bond trading revenue surges (Reuters) Morgan Stanley (MS.N) beat estimates for quarterly profit by a wide margin on Thursday, powered by strength in its investment management, bond trading and underwriting businesses.
Bombardier slashes forecast as it looks to accelerate debt payments (BNNBloomberg) Bombardier Inc. is cutting its full-year revenue and profit forecasts and is hunting for ways to accelerate debt repayments, the company said Thursday.
The Montreal-based plane and train maker expects its revenue for 2019 to come in at US$15.8 billion, down from previous forecast of as much as US$17 billion. It also now sees its adjusted earnings before interest and taxes coming in at US$400 million, down from its previous outlook of US$700 million and US$800 million.
Market Overview: US 10yr note futures are up 0.072% at 129-14, S&P 500 futures are up 0.29% at 3303.25, Crude oil futures are down -0.17% at $57.71, Gold futures are up 0.15% at $1556.4, DXY is down -0.11% at 97.121, CAD/USD is down -0.01% at 0.7669.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.635% | 2 Year | 1.552% |
| 5 Year | 1.551% | 5 Year | 1.59% |
| 10 Year | 1.537% | 10 Year | 1.774% |
| 30 Year | 1.661% | 30 Year | 2.228% |
US Economic Data
| 08:30 AM | Philadelphia Fed Business Outlook, Jan Survey: 380.00% Prior: 30.00% |
| Import Price Index MoM, Dec Survey: 0.30% Prior: 0.20% | |
| Import Price Index ex Petroleum MoM, Dec Survey: 0.10% Prior: 0.20% | |
| Import Price Index YoY, Dec Survey: 0.50% Prior: -1.30% | |
| Export Price Index MoM, Dec Survey: 0.20% Prior: 0.20% | |
| Export Price Index YoY, Dec Survey: — Prior: -1.30% | |
| Retail Sales Advance MoM, Dec Survey: 0.30% Prior: 0.20% | |
| Retail Sales Ex Auto MoM, Dec Survey: 0.50% Prior: 0.10% | |
| Retail Sales Ex Auto and Gas, Dec Survey: 0.40% Prior: 0.00% | |
| Retail Sales Control Group, Dec Survey: 0.40% Prior: 0.10% | |
| Initial Jobless Claims, 40544 Survey: 218k Prior: 214k | |
| Continuing Claims, 37987 Survey: 1750k Prior: 1803k | |
| 09:45 AM | Bloomberg Consumer Comfort, Survey: — Prior: 65.1 |
| 10:00 AM | Business Inventories, Nov Survey: -0.20% Prior: 0.20% |
| NAHB Housing Market Index, Jan Survey: 74 Prior: 76 | |
| 04:00 PM | Net Long-term TIC Flows, Nov Survey: — Prior: $32.5b |
| Total Net TIC Flows, Nov Survey: — Prior: -$48.3b |
Canadian Economic Data
| 08:30 AM | ADP Releases Payroll Data |
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