cti2015header-morning comments web

Market Update

US Treasuries open NY narrowly mixed after bottoming out at 7:08am ET at 10Y price 95-05/32, 2.559% yield. Action wanes as extended Christmas holiday weekend approaches with early close Friday; volume below 50% of 10-day average. Quiet trade in Asia hours (Friday Japanese holiday as well) even as 10Y China bond yield fell 20bps. Flow included some receivers in the intermediates, Asian central bank selling in 5s and 10s.- London trade included macro and prop acct sales in the intermediates; desks watching 2s5s10s fly that climbed to 17mo high of 30.8. Tsy futures ground lower post data, focus more on better GDP data than weekly claims, but rebounding after USH extended session low lightly. Current 10yr yld, +.0223 at 2.5570% last (200-DMA 1.7967), 30yr yld +0.0208 at 3.1288% last (200-DMA 2.5502).

News headlines

Futures little changed ahead of economic data (Reuters) U.S. stock index futures were little changed in light trading on Thursday ahead of a host of economic data. Volumes have been muted this week just ahead of the holiday season, subjecting the market to pronounced movements.

Oil prices dip on U.S. stocks rise, Libya output boost (Reuters) Oil prices slipped in tepid trading on Thursday, pressured by an unexpected rise in U.S. crude inventories last week and moves by Libya to boost output over the next few months. The decline was curbed by a weaker dollar and optimism that crude producers would abide by an agreement to limit output to prop up prices.

Monte Paschi Said Headed for Nationalization After Sale Failure (Bloomberg) Banca Monte dei Paschi di Siena SpA will probably fail to lure sufficient demand for a 5 billion-euro ($5.2 billion) capital increase, leading to what would be the country’s biggest bank nationalization in decades, said people with knowledge of the matter.

China’s Xi calls for wide-ranging measures to regulate hot property market (Reuters) President Xi Jinping said China’s approach to regulating its red-hot property market will include financial, fiscal, tax, land, and regulatory measures as Beijing looks to develop a long-term mechanism for an industry prone to speculation.

Brazil central bank slashes growth forecast, signals heftier rate cut (Reuters) Brazil’s central bank has cut its 2017 economic growth estimate and sees inflation remaining low in the next two years, signaling policymakers are ready to step up monetary easing to pull the economy out its worst recession in memory.

European Investment Bank launches one billion euro investment fund in Greece (Reuters) The European Investment Bank (EIB) launched a one billion euro credit line to Greek banks on Thursday to be channeled to small and medium sized companies and firms promoting youth employment.

Trump Organization Moves to Avoid Possible Conflicts of Interest (NY Times) In its latest effort to defuse a major public relations problem that might have loomed over Donald J. Trump’s presidency, the Trump Organization on Wednesday announced union accords at two major hotel holdings.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.1647% at 123-3, S&P 500 futures are down -0.04% at 2259.5, Crude oil futures are down -0.15% at $52.41, Gold futures are down -0.19% at $1131, DXY is down -0.04% at 102.98, CAD/USD is up 0.63% at 0.7409.

US Economic Data

8:30 AM Chicago Fed National Activity Index, Nov, -0.27, est. -0.10 (prior -0.08, revised -0.05)
  GDP Annualized, q/q, 3Q T, 3.5%, est. 3.3% (prior 3.2%)
  GDP Price Index, 3Q T, 1.4%, est. 1.4% (prior 1.4%)
  Personal Consumption, 3Q T, 3.0%, est. 2.8% (prior 2.8%)
  Core PCE, q/q,  3Q T, 1.7%, est. 1.7% (prior 1.7%)
  Durable Goods Orders, Nov P, -4.6%, est. -4.8% (prior 4.6%, revised 4.8%)
  Durables Ex Transportation, Nov P, 0.5%, est. 0.2% (prior 0.8%, revised 0.9%)
  Cap Goods Orders Nondef Ex Air, Nov P, 0.9%, est. 0.4% (prior 0.2%)
  Cap Goods Orders Ship Nondef Ex Air, Nov P, 0.2%, est. 0.1% (prior -0.1%, revised -0.3%)
  Initial Jobless Claims, Dec 17th , 275k, est. 257k (prior 254k)
  Continuing Claims, Dec 10th, 2036k,est. 2010k (prior 2018k, revised 2021k)
9:00 AM FHFA House Price Index, m/m, Oct, est. 0.5% (prior 0.6%)
10:00 AM Personal Income, Nov, est. 0.3% (prior 0.6%)
  Personal Spending, Nov, est. 0.3% (prior 0.3%)
  Leading Index, Nov, est. 0.1% (prior 0.1%)
11:00 AM Kansas City Fed Manufacturing Activity, Dec, est. 4 (prior 1)

Canadian Economic Data 

8:30 AM CPI, y/y, Nov, 1.2%, est. 1.4% (prior 1.5%)
  CPI SA, m/m, Nov, -0.2%, est. 0.2% (prior 0.2%)
  Retail Sales, m/m, Oct, 1.1%, est. 0.3% (prior 0.6%, revised 0.8%)
  Retail Sales Ex Auto, m/m, Oct, 1.4%, est. 0.7% (prior 0.0%, revised 0.3%)


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