Market Update
US tsys lower, yields ~2bps higher led by the 10Y @ 2.564 (+2.6bps). Tsys weaker after BOJ kept policy unch, USD/JPY +0.7%, after yesterday’s late day ftq rally on Berlin attack & shooting of Russian ambassador, thou thin volumes seen exacerbating moves in tsy & bund futures. Core Euro bonds also lower led by 5Y bunds , increase in German PPI to 0.3% above 0.1% exp. GOCs lower , outperforming tsys in the pullback by ~2bps in 10s, provi spds unch. Not much to go on in terms of econ data until Thursday’s CPI/retail sales & Friday Oct GDP. The BOC auctions $3.9bln in Feb 19s (2Ys) with the Feb19/2Y roll steady at 2.5bps. 2Y yields are ~11bps higher since the last auction on Nov 30th, thou the curve has also bear steepened as the short end has been relatively more anchored by the on-hold BOC policy stance.
News headlines
Stocks Climb as Markets Show Resilience; Bonds Drop With Gold (Bloomberg) European stocks climbed to their highest this year, while bonds and gold fell, demonstrating markets’ increasing resilience to geopolitical shocks. The yen slid after the Bank of Japan maintained its stimulus plan.
BOJ upbeat on economy, Kuroda shrugs off talk of rate hike (Reuters) Bank of Japan Governor Haruhiko Kuroda offered an upbeat view of the economy but sought to douse market talk the central bank may soon consider raising interest rates, vowing instead to keep policy loose to achieve the BOJ’s 2 percent inflation goal.
Oil rises on expected U.S. crude stocks draw (Reuters) Oil prices edged higher on Tuesday on forecasts of a steep draw in U.S. crude oil stocks that could indicate a global oversupply is starting to shrink. Benchmark Brent crude oil futures LCOc1 were trading up 54 cents at $55.46 a barrel at 1124 GMT. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were up 23 cents at $52.35 per barrel.
Obama Said to Use 1953 Law to Block Drilling in Arctic, Atlantic (Bloomberg) President Barack Obama is preparing to block the sale of new offshore drilling rights in much of the U.S. Arctic and parts of the Atlantic, a move that could indefinitely restrict oil production there, according to two people familiar with the decision.
Canada’s CCL to buy British bank note maker Innovia for $1.1-billion (GlobeandMail) Canadian label and packaging maker CCL Industries Inc said it would buy Innovia Group, which supplies the new UK plastic five pound note that has fallen foul of vegetarians, for around $1.13-billion. The acquisition of UK-based Innovia is expected to make CCL the world leader in the fast-growing polymer banknote market.
BlackBerry posts wider quarterly loss, revenue slides (GlobeandMail) BlackBerry is reporting a third-quarter loss of $117-million (U.S.), the smallest of the current financial year. The Waterloo, Ont.-based company, which reports in U.S. currency, says the latest quarterly loss amounted to 22 cents per basic share before adjustments
Overnight markets
Overview: US 10yr note futures are down -0.2155% at 123-0, S&P 500 futures are up 0.27% at 2266, Crude oil futures are up 0.42% at $52.34, Gold futures are down -0.98% at $1131.5, DXY is up 0.37% at 103.52, CAD/USD is down -0.07% at 0.7462.
US Economic Data
There is no major economic news for today
Canadian Economic Data
| 8:30 AM | Wholesale Trade Sales, m/m, Oct, 1.1%, est. 0.5% (prior -1.2%, revised -1.5%) |
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, David Leclair-Legault
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230