Market update
US sys moving lower after Fed Lockhart comments that it may be appropriate to start ‘new policy phase’ thou ‘hike pace might be somewhat slow’.. Tsy yields 2-3 bps higher across the curve, US 10Y 2.29 (+2bps) extending underperformance vs UK gilts, German bunds, the former ~3bps lower in the 10Y on dovsh comments from BOE Broadbent. Euro stocks lower, yet off earlier while US fut slightly higher. Fed minutes from Oct meeting at 2:00EST. GOCs lower, lagging tsys by ~1bp on the pullback. Provis tighter again this morn after closing 1-1.5bps tighter yest, Ont 46s 104/103. Selling in CMBs overnite. Yet cmbs 1bp tighter since yest aft, WI 25s traded up at 62 yest, pricing is this morning ~63bps.
News headlines
- Fed’s Lacker: Economic impact of terror attacks is transitory (CNBC) Richmond Fed President Jeffrey Lacker said Wednesday any economic impact of the Paris terror attacks would likely be transitory. He appeared on CNBC’s « Squawk Box » ahead of the afternoon release of the minutes from the Federal Open Market Committee’s October meeting.
- Goldman: The U.S. Economy Will Need More Than Just Consumers in 2016 (Bloomberg) In 2015, American consumers put the economy on their backs. Next year, however, the economy will need to be firing on more cylinders in order to keep eating into slack, according to Goldman Sachs.
- Bond investors freed to tackle interest rate risk (FT) If fund managers had theme songs, then a small but swelling part of the global bond investment industry would probably choose Queen’s “I Want to Break Free”.
- Hints get heavy for ECB’s hard task ahead (FT) The hints, known in the language of central bank watching as signals, have become heavy. The European Central Bank will do something in December to further stimulate the eurozone economy, by extending or enlarging its experiment in unconventional monetary policy.
- US bond dealers hold net negative positions (FT) Official figures reveal that bond dealers in the US are for the first time in aggregate holding net negative positions of company debt with a maturity longer than a year. Corporate bond inventories have been in decline for some time, with analysts pointing to the higher cost of capital as a constraint on banks’ balance sheets.
Overnight markets
- Overview: IG24 5Y 77.946/78.696 (-0.880), US 10yr note futures are down -0.18% at 126-15, S&P 500 futures are up +0.37% at 2055.5, Crude oil futures are down -0.77% at 41.42$, Gold futures are down -0.23% at $1081.1, DXY is down -0.01% at 99.436.
US Economic Data
- MBA mortgage applications came in this morning at 6.2% for the week ending November 13th, versus prior week -1.3% decrease.
- Housing starts came in at 1060K (-11.0% MoM) in October versus September 1191K (6.7% MoM).
- Building permits increase to 1150K (4.1% MoM) in October compared to previous month 1103K (-5.0% MoM).
- Fed minutes from October 27-28 FOMC meeting will be release at 14:00.
Canadian Economic Data
- There is no major economic data today.
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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230