Market Update

Tsys weaker, yields 1.2-2bps higher with the 10Y 2.373% (+2bps), avg volume in TY futures (205k). Equities stronger with S&P futures +10, crude higher for third day , +0.46% 57.55.  Optimism on passage of US tax cut with Senate to vote as early as tomorrow. Tsys weaker into European trading, lagging the rally in EGBs with bund/gilt yields 1-2 lower. GOCs lower, in line with tsys, curve slightly flatter – Friday’s late day rally in longs left the GOC 5s30s the flattest in ten years. A large 0.08yr extension in the FTSE TMX index supporting the long end, yet over the past month there has also been a significant increase in the correlation between movement in the  GOC curve and the tsy curve. Provi spreads starting firm, Ont 27s trading down at 58bps , a new low , 2bps tighter since last Monday. 

News headlines 

Everything You Need to Know About the GOP Tax Bill (Bloomberg)  Here are key changes to U.S. tax law for individuals and businesses that have emerged from the final Republican bill that’s headed for votes in the House and Senate next week.

May Risks Brexit Row Over Migration and Trade During Transition (Bloomberg) U.K. Prime Minister Theresa May will set out her plan for how a proposed Brexit transition period will work, stoking a potential new row with the European Union as she tries to keep different factions inside the Conservative Party on her side.

Stocks Hit Records With GOP Set to Unveil Tax Bill: Markets Wrap (Bloomberg) U.S. stocks rallied to new highs and the dollar strengthened as investors grew increasingly optimistic that Congress would reach a deal to cut corporate taxes.

Modi Set to Retain Grip on Home State After Bellwether Vote (Bloomberg) Indian Prime Minister Narendra Modi’s party is set to return to power in his home state, an election that’s considered a bellwether before the national vote in early 2019.

Bombardier’s Chinese Joint Venture Wins its First Monorail Contract in China (MarketWired) Rail technology leader Bombardier Transportation announced today that the CRRC Puzhen Bombardier Transportation Systems Limited (PBTS), a joint venture (JV) between Bombardier Transportation and the Chinese CRRC Corporation Limited (CRRC), has been awarded its first monorail contract in China. The order is to provide the BOMBARDIER INNOVIA Monorail 300 platform, along with a total of 240 cars to Wuhu City in Anhui Province. The total contract is valued at approximately 1.785 billion CNY (229 million euro, $270 million US). Bombardier owns 50% of the shares in PBTS, which is consolidated by Bombardier Transportation’s partner CRRC Nanjing Puzhen Limited.

Duelling bitcoin futures go head-to-head as CME launches contract (Financial Times) The bitcoin futures race began in earnest on Sunday as exchange operator CME Group challenged another Chicago exchange that had launched the first digital currency futures a week before.

Campbell Soup to buy snacks maker Snyder’s-Lance for $4.87 billion (Reuters) Campbell Soup Co CPB.N will buy Pretzels and Cape Cod chips maker Snyder‘s-Lance Inc LNCE.O for $4.87 billion as it looks to expand its snack business amid sagging soup sales.

Overnight markets

Overview: US 10yr note futures are down -0.126% at 124-09, S&P 500 futures are up 0.37% at 2692, Crude oil futures are up 0.56% at $57.62, Gold futures are up 0.37% at $1262.2, DXY is down -0.29% at 93.662, CAD/USD is up 0.05% at 0.7768. 

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.569% 2 Year 1.848%
5 Year 1.696% 5 Year 2.172%
10 Year 1.855% 10 Year 2.371%
30 Year 2.132% 30 Year 2.7%

US Economic Data

10:00 AM NAHB Market Index, Dec est 70 (70 prior)

Canadian Economic Data

8:30 AM Int’l Securities Transactions, Oct 20.81b (16.81b prior)
10:00 AM Bloomberg Nanos Confidence Index, Dec (59.0 prior)



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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230