Market Update
US tsys higher, yields 1-2.5bps lower with the 10Y 1.75% (-2.5bps), tsy curve 1bp flatter on heavier volume due to the Dec/Mar roll, prices buoyed by rally in core EGBs on weak data. UK PMI data missed (48.6 vs 50.1), gilts bull flattening with yields 4-6bps lower. GOCs higher, lagging the move in tsys by 1bp in 10s. Sep retail sales expected to have declined 0.3% m/m due to lower gas and autos (auto sales -3.7% in Sep). Poloz stuck with a neutral tone in his ‘fireside chat’ yesterday, saying monetary conditions are ‘about right’, disappointing the doves after Wilkins earlier comments.
News headlines
U.S. Equity Futures Edge Higher as Treasuries Gain: Markets Wrap (Bloomberg) U.S. equity futures edged higher while European stocks advanced as investors digested the latest headlines on the trade dispute between America and China. Treasuries rose along with most benchmark bonds in Europe after some mixed economic data.
CANADA STOCKS-TSX futures rise on U.S.-China trade optimism (Reuters) Canada’s main stock index futures were up on Friday, as investors were hopeful about China’s willingness to work with the U.S. on the trade deal.
Oil Pares Third Weekly Gain Amid Mixed Signals on Trade Deal (Bloomberg) Oil pared its third weekly advance amid mixed signals on a trade agreement between the U.S. and China, which would end an impasse that has weighed on the global economy and fuel demand.
CN Rail strike triggers emergency propane shortage in Quebec (BNN) Quebec is facing an emergency shortage of propane and shipments of oil, grain and metal are grinding to a halt as the impact of a rail strike in Canada threatened to take a multibillion-dollar chunk out of the nation’s economy.
China’s Xi says he wants to work out initial trade deal with U.S. (Reuters) China wants to work out an initial trade pact with the United States and has been trying to avoid a trade war, President Xi Jinping said on Friday, but is not afraid to retaliate when necessary.
GDP revisions put China on target to double economy, but data doubts remain (Reuters) China on Friday revised up its nominal 2018 gross domestic product (GDP) by 2.1% to 91.93 trillion yuan ($13.08 trillion), keeping it on track to achieving its goal of doubling the size of its economy by 2020 from 2010.
Bridgewater Associates bets over $1 billion on market drop: WSJ (Reuters) Bridgewater Associates LP, a hedge fund founded by billionaire Ray Dalio, has bet more than $1 billion that stock markets around the world will fall by March, the Wall Street Journal reported on Friday, citing people familiar with the matter.
ECB can’t be complacent about bubble risks: Weidmann (Reuters) The European Central Bank should not be complacent if its ultra- easy policy fuels bubbles because the tools devised to mitigate these imbalances are in their infancy, Bundesbank President Jens Weidmann said on Friday.
Market Overview: US 10yr note futures are up 0.109% at 129-20, S&P 500 futures are up 0.15% at 3108.75, Crude oil futures are down -0.32% at $58.39, Gold futures are up 0.39% at $1476.3, DXY is up 0.04% at 98.028, CAD/USD is down -0.07% at 0.7532.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.553% | 2 Year | 1.595% |
| 5 Year | 1.483% | 5 Year | 1.601% |
| 10 Year | 1.464% | 10 Year | 1.753% |
| 30 Year | 1.578% | 30 Year | 2.208% |
US Economic Data
| 09:45 AM | Markit US Services PMI, Nov P Survey: 51.0 Prior: 50.6 |
| Markit US Manufacturing PMI, Nov P Survey: 51.4 Prior: 51.3 | |
| Markit US Composite PMI, Nov P Survey: — Prior: 50.9 | |
| 10:00 AM | U. of Mich. Sentiment, Nov F Survey: 95.7 Prior: 95.7 |
| 11:00 AM | Kansas City Fed Manf. Activity, Nov Survey: -2 Prior: -3 |
Canadian Economic Data
| 08:30 AM | Retail Sales MoM, Sep Survey: -0.30% Prior: -0.10% |
| Retail Sales Ex Auto MoM, Sep Survey: -0.10% Prior: -0.20% |
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