Market Update Tsys trading higher, top of o/n range on above avg volume , 10Y 3.05% (-1.5bps). US stock futures are lower, Euro stocks mixed, while brent crude fell to the lowest level since 2017. GOCs outperforming tsys by 0.5-1bp despite Oct CPI rising to 2.4% y/y from 2.2% in Sep, even as the core rate was unch at 2.0%.
News headlines
Trump, Xi Signal Readiness for Trade Talks Ahead of G-20 Meeting (Bloomberg) U.S. President Donald Trump and Chinese leader Xi Jinping have indicated they’re both ready for a highly anticipated meeting at the Group of 20 summit in Argentina next week. The world’s biggest economies have been engaged in an escalating trade war that is starting to have a greater impact on financial markets and global growth. On Thursday, Trump told reporters that China wants to make a deal “very badly” after his administration placed tariffs on on about $200 billion worth of Chinese goods.
Oil Slumps Again to One-Year Low as Saudis Signal Record Output (Bloomberg) Oil slumped to the lowest in a year after Saudi Arabia signaled its output may have reached a record high and growing U.S. stockpiles stoked concerns over a potential supply glut. New York futures dropped 5.3 percent from their Wednesday settlement price in a trading session lengthened by the Thanksgiving holiday in the U.S., set for a seventh weekly decline. Traders are focused on the growing risks of a new glut of crude: Saudi Arabia’s oil minister said Thursday production from the world’s largest exporter climbed further this month after a surge in October, and U.S. stockpiles have risen for nine straight weeks.
Euro-Area Economy Puts Another Dent in ECB Hopes for Rebound (Bloomberg) The euro-area economy stumbled again this month, with a key indicator falling to the lowest in four years, denting expectations for an economic pickup after a summer slowdown. Adding to worries, the composite PMI from IHS Markit also showed that employment and orders growth slowed and companies’ expectations dropped. The euro, which plunged earlier after a weak reading in Germany, was down 0.3 percent against the dollar.
U.S. Stock Futures Drop; Copper Declines With Oil: Markets Wrap (Bloomberg) U.S. equity futures pointed to a weaker open and Asian benchmarks declined on Friday, while European stocks edged higher. Oil fell and headed for a seventh weekly loss on signs of oversupply, leading commodities lower. Contracts on the Dow, S&P and Nasdaq all pointed to markets reopening with a drop following the Thanksgiving holiday. Chinese Chinese equities led regional declines in Asia, with the technology sector weak on concern the U.S. is ratcheting up a campaign against Huawei Technologies Co. Meanwhile, banks and technology companies helped the Stoxx Europe 600 Index eke out a small advance. The dollar climbed and the euro reversed earlier gains as data showed Germany’s growth outlook weakened. The pound handed back much of Thursday’s gains after Spain said it may vote against the Brexit plan. Italian bonds led an advance in European debt markets.
Desperate to move crude, Alberta may buy trains alone if Canada balks (Reuters) Alberta is willing to buy trains itself to help clear a backlog of crude oil if Ottawa decides not to back the Canadian province’s proposal to split the costs of new rail cars, Premier Rachel Notley said on Thursday. Notley said Alberta had asked Prime Minister Justin Trudeau’s government to help pay for additional rail capacity to move an additional 120,000 to 140,000 barrels per day. Notley said Alberta had not received an answer from Ottawa.
Canada needs to do more to nurture its tech clusters, report says (BNN) Canada’s growing tech talent is drawing more investment to cities like Toronto and Montreal, but the country could lose momentum if it doesn’t do more to encourage industries to scale up, according to CBRE Ltd. The country lacks “tech clusters,” dense areas of activity that contain critical mass for companies and educational and research institutions, the Toronto-based brokerage said in a report Thursday. Tech clusters like those in San Francisco and Seattle have helped propel those cities to global success but Toronto is the only Canadian city competitive enough to rank among powerhouses in North America.
Trump says CIA didn’t conclude Saudi prince had role in Khashoggi murder (BNN) President Donald Trump disputed that U.S. intelligence officials have definitively concluded that Saudi’s crown prince ordered the murder of U.S.-based columnist Jamal Khashoggi, while continuing to tout the importance of maintaining economic ties with the Kingdom. A confidential Central Intelligence Agency report on Khashoggi’s death says Crown Prince Mohammed bin Salman “might have done it,” Trump said Thursday, referring to a demand that the journalist be killed. But the CIA “didn’t conclude” that the prince made the demand, the president told reporters during a press conference at his Mar-a-Lago resort in Florida.
Overnight markets
Overview: US 10yr note futures are up 0.026% at 119-09, S&P 500 futures are down -0.37% at 2639.25, Crude oil futures are down -4.3% at $52.28, Gold futures are down -0.39% at $1223.2, DXY is up 0.09% at 96.796, CAD/USD is up 0.26% at 0.7561.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 2.238% | 2 Year | 2.818% |
| 5 Year | 2.299% | 5 Year | 2.88% |
| 10 Year | 2.353% | 10 Year | 3.052% |
| 30 Year | 2.405% | 30 Year | 3.302% |
US Economic Data
| 9:45 AM | Markit US Manufacturing PMI, Nov est 55.7 (55.7 prior) |
| Markit US Services PMI, Nov est 55.0 (54.8 prior) | |
| Markit US Composite, Nov (54.9 prior) |
Canadian Economic Data
| 8:30 AM | Retail Sales MoM, Sep 0.2% est 0.0% (-0.1% prior) |
| Retail Sales Ex Auto MoM, Sep 0.1% est 0.3% (-0.4% prior) | |
| CPI NSA MoM, Oct 0.3% est 0.1% (-0.4% prior) | |
| CPI YoY, Oct 2.4% est 2.2% (2.2% prior) | |
| Consumer Price Index, Oct 134.1 est 134.0 (133.7 prior) | |
| CPI Core- Common YoY%, Oct 1.9% est 1.9% (1.9% prior) | |
| CPI Core- Median YoY%, Oct 2.0% est 2.0% (2.0% prior) | |
| CPI Core- Trim YoY%, Oct 2.1% est 2.1% (2.1% prior) |
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
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230