Market Update
US tsys trading slightly higher on low volume in TY futures (225k), 10Y 1.86% (-1bp). UK gilts leading EGBs higher, yields 2-5bps lower and the GBP -1.0% as Boris Johnson looks to amend the Brexit bill to rule out any extension of the post-Brexit transition period beyond Dec 2020. UK Oct employment data showed 24k rise vs -14k exp with the unemployment rate at 3.8% vs 3.9% in Sep. US data includes Nov Housing Starts and IP/Cap Util data. Fed speakers Kaplan and Williams this aft. In Canada GOCs are higher in line with tsys, 10Y 1.62%. Two year auction tomorrow – reopening of the Feb 22s for $3bln, with the Feb 22/2Y roll -0.7bps. Active day in primary issuance yest with $2.4bln across three issues – $1.5bln RY NVCC 10NC5 @ 129 , $750mln NA 5Y @94, $150mln Crombie long 7Y @ 225 – the latter 10x oversubscribed.
News headlines
Global Stock Rally Stalls as U.S. Futures Struggle: Markets Wrap (Bloomberg) U.S. stock futures struggled for direction while European shares fell on Tuesday as the global rally in equities eased. With the sugar rush of a partial trade deal between the two largest economies fading, investors pushed up the dollar and Treasuries.
TSX set to break three-day win streak (Reuters) Canada stocks futures fell on Tuesday, putting the main index on track to break a three-day winning streak, as optimism over an interim U.S.-China trade deal waned.
Oil Holds Near $60 as Easing U.S.-China Tension Aids Outlook (Bloomberg) Oil held near $60 a barrel on optimism the partial U.S.-China trade pact will bolster demand, while analysts estimated a pullback in American crude stockpiles.
Exclusive: U.S. initial crackdown on advanced tech exports appears more restrained than feared (Reuters) The Trump administration is finalizing a set of narrow rules to limit exports of sophisticated technology to adversaries like China, a document seen by Reuters shows, in a boon to U.S. industry that feared a much tougher crackdown on sales abroad.
Finance’s final frontier? British watchdog probes data sharing (Reuters) Britain’s Financial Conduct Authority (FCA) is investigating whether sharing data with outside competitors could be extended beyond banks to savings, insurance, mortgages, investments, pensions and consumer credit to increase innovation and choice.
UK jobs growth resumes, unemployment rate near 45-year low (Reuters) The number of people in work in Britain unexpectedly rose in the three months before the missed Oct. 31 deadline for Brexit, according to data which suggests the labor market was retaining some of its strength.
ECB may need more flexibility around inflation target: Müller (Reuters) The European Central Bank should have greater flexibility around its inflation goal and could consider targeting price growth in a band, Estonian central bank chief Madis Müller said on Tuesday.
Pound and stocks flop as Brexit fears resurface (Reuters) European stocks skidded off record highs and sterling dropped more than 1% on Thursday, as reports that Britain’s prime minister was ready to play rough in Brexit talks brought December’s cross-market rally to a halt.
Exclusive: Russian officials in talks to transfer central bank’s Sberbank stake – sources (Reuters) Russian officials are in talks to transfer the central bank’s stake in Sberbank (SBER.MM), the country’s top bank, to another state entity, four sources said, amid growing unease about the central bank’s role as both owner and supervisor.
Market Overview: US 10yr note futures are up 0.158% at 128-20, S&P 500 futures are down -0.01% at 3198.25, Crude oil futures are up 0.28% at $60.38, Gold futures are up 0.2% at $1483.5, DXY is up 0.03% at 97.048, CAD/USD is up 0.07% at 0.7595.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.689% | 2 Year | 1.631% |
| 5 Year | 1.63% | 5 Year | 1.695% |
| 10 Year | 1.625% | 10 Year | 1.863% |
| 30 Year | 1.714% | 30 Year | 2.28% |
US Economic Data
| 08:30 AM | Housing Starts, Nov Survey: 1345k Actual: 1365k Prior: 1314k |
| Building Permits, Nov Survey: 1418k Actual: 1482k Prior: 1461k | |
| Housing Starts MoM, Nov Survey: 2.30% Actual: 3.20% Prior: 3.80% | |
| Building Permits MoM, Nov Survey: -2.90% Actual: 1.40% Prior: 5.00% | |
| 09:15 AM | Industrial Production MoM, Nov Survey: 0.80% Prior: -0.80% |
| Manufacturing (SIC) Production, Nov Survey: 0.90% Prior: -0.60% | |
| Capacity Utilization, Nov Survey: 77.40% Prior: 76.70% | |
| 10:00 AM | JOLTS Job Openings, Oct Survey: 7009 Prior: 7024 |
Canadian Economic Data
| 08:30 AM | Manufacturing Sales MoM, Oct Survey: 0.00% Actual: -0.70% Prior: -0.20% |
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