Market Update

Tsys weakening in NA trade, 10Y 2.41%, risk on as passage of US tax bill set for a vote in the House at 1:30pm. US Housing starts rose to the highest in a decade in Nov, +3.3% m/m vs -3.1% exp. German bunds, gilts weaker , yields 2-3bps higher, underperforming tsys.  GOCs lower led by the 10Y which is ~5bps wider on the fly vs 2s30s, 10s30s below 26bps , flattest  in 10 yrs. Provis open unch, Ont 49s 68.5, was reopened yest at 68 or -1 vs Ont 48s.

News headlines 

Here’s Where the GOP Tax Plan Stands Right Now (Bloomberg) Congressional Republicans kicked off the final leg of their six-week legislative sprint to overhaul the U.S. tax code and deliver a major policy victory for President Donald Trump before year’s end. The House is scheduled to vote Tuesday on the tax bill and Senate leaders intend to bring the measure up as soon as they get it.

Michel Barnier Doubles Down on Brexit (Bloomberg) European Union Chief Negotiator Michel Barnier dug in and stressed a hardline trade position just as U.K. Prime Minister Theresa May’s key ministers were starting to unite behind a Brexit policy that may soothe rifts in her Cabinet.

South African Stocks Rally as Ramaphosa Seen as Watershed (Bloomberg) South Africa’s benchmark stocks index had their biggest rally since March following the ascent of the business and investor-friendly Cyril Ramaphosa to leader of the ruling African National Congress, removing an overhang that had weighed on market sentiment.

Stocks Mixed as Euro Climbs; Core Bonds Decline: Markets Wrap (Bloomberg) European stocks struggled to build on Monday’s gains as the common currency advanced, while U.S. equity futures edged higher as the prospects for tax cuts in the world’s largest economy continued to buoy sentiment.

Short Seller Says Naive Bitcoin Traders Open a Pathway to Profit (Bloomberg) As newly launched derivatives contracts draw pros into the bitcoin market, a short seller still sees a massive inefficiency — and a chance to profit off naïve traders.

Canada oil producers exhaust options as pipelines, railroads fill (Reuters) Canadian oil producers are running out of options to get crude to market as pipeline and rail capacity fills up, driving prices to four-year lows and increasing the risk of firms having to sell cheaply until at least late 2019.

Boeing-Bombardier spat puts U.S.-Canadian trade deals in spotlight (Reuters) Boeing Co and Bombardier Inc traded barbs on Monday over the U.S. planemaker’s claim that its Canadian rival benefited from billions of dollars in illegal government subsidies and dumped its newest jetliner in the United States at below cost.

Overnight markets

Overview: US 10yr note futures are down -0.151% at 124-02, S&P 500 futures are up 0.1% at 2697.25, Crude oil futures are up 0.63% at $57.52, Gold futures are down -0.06% at $1264.7, DXY is down -0.15% at 93.552, CAD/USD is up 0.01% at 0.7774. 

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.587% 2 Year 1.844%
5 Year 1.733% 5 Year 2.188%
10 Year 1.906% 10 Year 2.414%
30 Year 2.165% 30 Year 2.767%

 US Economic Data

8:30 AM Housing Starts, Nov 1297k est 1250k (1290k prior)
  Housing Starts MoM, Nov 3.3% est -3.2% (13.7% prior)
  Building Permits, Nov 1298k est 1270k (1297k prior)
  Building Permits MoM, Nov -1.4% est -3.5% (5.9% prior)
  Current Account Balance, 3Q -100.6b est -116.2b (-123.1b prior)

Canadian Economic Data

There is no Canadian economic data for 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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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