Market Update

US  tsys  trading higher on heavy volume in TY futures (610k), 10Y  1.795% (-2.5bps). Risk off move linked to deaths tied to Coronavirus in China, US equity futures lower with S&P -10.25, thou crude and gold are lower.  European bonds mostly lower led by 10Y gilts ~ UK employment came in above exp (208k vs 110k exp) with AHE 3.2% vs 3.1% exp). GOCs higher, lagging the move in tsys by 1bp in 10s. Nov Manufacturing Sales weaker than exp (-0.6% vs -0.5%) with Oct revised lower. Dec CPI and BOC rate decision tomorrow.

News headlines

U.S. Futures Slip as Europe Stocks Trim Decline: Markets Wrap (Bloomberg) U.S. equity futures slipped on Tuesday, pointing to declines after the long weekend as investors grapple with worries about a deadly virus in China that sparked earlier declines across Asia and Europe. Treasuries rose.

TSX falls on China virus worries, weaker oil prices (Reuters) Futures for Canada’s main stock index were lower on Tuesday, as rising worries about a new virus in China prompted a flight to safe-haven assets and oil prices fell on easing supply concerns.

Oil Slides as Ample Supplies Soften Shock of Libya Disruption (Bloomberg) Oil fell as global markets remained comfortably supplied despite the suspension of exports from Libya, and as equities faltered on political and economic worries in Asia.

Trump takes credit for economic boom ahead of impeachment trial (BNN) President Donald Trump boasted about his handling of the U.S. economy in a speech to business and political leaders in Davos, hours before his impeachment trial was set to begin in Washington.

China virus sends shiver through markets as risks mount (Reuters) Global shares took a beating on Tuesday, wiping out all gains made at the start of the week as mounting concerns about a new strain of coronavirus in China sent a ripple of risk aversion through markets.

Mnuchin says Phase 2 trade deal may not remove all tariffs: WSJ (Reuters) The Phase 2 trade deal with China would not necessarily be a “big bang” that removes all existing tariffs, U.S. Treasury Secretary Steven Mnuchin told the Wall Street Journal in an interview.

BOJ raises growth forecast, signals status quo on policy outlook (Reuters) The Bank of Japan nudged up its economic growth forecasts on Tuesday and was cautiously optimistic about the global outlook, though it said ongoing risks meant it was far to soon to consider scaling down its massive stimulus program.

China virus sends chill through markets as risks rise (Reuters) Global stock markets took a hit on Tuesday as mounting concern about a new strain of coronavirus in China sent a ripple of risk aversion through markets.

Market Overview: US 10yr note futures are up 0.242% at 129-12, S&P 500 futures are down -0.29% at 3315.25, Crude oil futures are down -1.47% at $57.68, Gold futures are down -0.36% at $1554.7, DXY is down -0.16% at 97.45, CAD/USD is up 0.09% at 0.7657.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.64% 2 Year 1.543%
5 Year 1.565% 5 Year 1.596%
10 Year 1.552% 10 Year 1.795%
30 Year 1.669% 30 Year 2.257%

US Economic Data

There is no US economic data for today

Canadian Economic Data

08:30 AM Manufacturing Sales MoM, Nov  Survey: -0.50% Actual : -0.60%  Prior: -0.70%

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