Market Update
US tsys trading weaker, yields 1.5-2.5bps higher with the 10Y 1.845% (+2.3bps), avg volume in TY futures (350k). Equity futures higher, S&P +14 – relief with phase one trade deal confirmed Friday and UK election decided. Core EGBs outperforming after misses in French, German and UK PMIs, 10Y bund/tsy spread 4bps wider. Focus this week in terms of US data Philly Fed Thurs and Q3 GDP Friday. GOCs lower, 2bps wider vs tsys, 10Y 1.625%. Canadian data this week highlighted by CPI Wednesday and Retail Sales Friday.
News headlines
U.S. Futures Climb as European Stocks Hit Record: Markets Wrap (Bloomberg) U.S. equity futures and European stocks started the week on the front foot amid hopes a partial trade deal between America and China eases a key risk for investors heading into year-end. Treasuries slipped.
TSX futures rise on trade optimism (Reuters) Canada’s main stock index futures rose on Monday, following a preliminary trade agreement between the United States and China, which was announced on Friday.
Oil Near Three-Month High on Cautious Optimism Over Trade Deal (Bloomberg) Oil steadied near a three-month high on cautious optimism that a preliminary trade deal between the U.S. and China will support global fuel consumption.
U.S. top trade negotiator praises deal, China remains cautious (Reuters) U.S. President Donald Trump’s top trade negotiator praised a “phase one” U.S.-China trade deal which is expected to nearly double U.S. exports to China over the next two years, while China remained cautious ahead of the signing of the agreement.
Euro zone business growth stayed weak in December: flash PMIs (Reuters) Euro zone business growth remained weak in December, with tepid foreign demand exacerbating a contraction in manufacturing and offsetting a slight pick-up in services activity, although some analysts saw signs of stabilization.
Costco in Caracas: how Florida goods flood Venezuelan stores (Reuters) While U.S. President Donald Trump wants to drive Venezuela’s socialist ruler out of power with economic sanctions, there has in fact been a burgeoning influx of American-bought goods from Nutella spread to Oreo cookies.
ECB has minor impact on inequality: Lane (Reuters) The European Central Bank’s monetary policy has relatively little impact on inequality, Philip Lane, the bank’s chief economist said, responding in part to criticism that large scale asset buys widen the social gap.
China’s factory, retail sectors shine as trade tensions thaw (Reuters) Growth in China’s industrial and retail sectors beat expectations in November, as government support propped up demand in the world’s second-largest economy and amid easing trade hostilities with Washington.
Market Overview: US 10yr note futures are down -0.242% at 128-23, S&P 500 futures are up 0.46% at 3190, Crude oil futures are down 0% at $60.07, Gold futures are down -0.01% at $1481, DXY is down -0.22% at 96.961, CAD/USD is down -0.39% at 0.7625.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.686% | 2 Year | 1.628% |
| 5 Year | 1.628% | 5 Year | 1.687% |
| 10 Year | 1.625% | 10 Year | 1.854% |
| 30 Year | 1.719% | 30 Year | 2.278% |
US Economic Data
| 08:30 AM | Empire Manufacturing, Dec Survey: 4.0 Prior: 2.9 |
| 09:45 AM | Markit US Composite PMI, Dec P Survey: — Prior: 52.0 |
| Markit US Manufacturing PMI, Dec P Survey: 52.6 Prior: 52.6 | |
| Markit US Services PMI, Dec P Survey: 52.0 Prior: 51.6 | |
| 10:00 AM | NAHB Housing Market Index, Dec Survey: 70 Prior: 70 |
| 04:00 PM | Net Long-term TIC Flows, Oct Survey: — Prior: $49.5b |
| Total Net TIC Flows, Oct Survey: — Prior: -$37.6b |
Canadian Economic Data
| 08:30 AM | Int’l Securities Transactions, Oct Survey: — Prior: 4.76b |
| 09:00 AM | Existing Home Sales MoM, Nov Survey: — Prior: 0.00% |
| 10:00 AM | Bloomberg Nanos Confidence, Dec 13 Survey: — Prior: 55.1 |
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