23/11/2015

cti2015header-morning comments web

Market update

US tsys weaker curve flatter led by 5Y, US 10Y 2.30 (+3.4bps), 2Y @0.946 – a high since April 2010. Core euro bonds weaker led by 10Y bunds (+6.5bps) @ 0.54% pressured by stronger PMIs (See above) & supply. Belgium sold 10Y &12Y debt while Germany, Spain & Netherlands all have supply this week with no reinvestment flows (MNI). Meanwhile 2Y bund dropped to record low yield -0.39%. GOCs are lower, curve steeper modestly underperforming tsys in the back end. Provis unch to start with Ont in blackout, QC issuing last week – BC, Newf, Alta all rumoured.

News headlines

  • Metals hit multiyear lows as dollar gains (FT) Metal prices are near multiyear lows as a strong dollar exacerbates oversupply fears amid concerns about weak demand from China. However, a rebound in oil prices on hopes Saudi Arabia would make moves to stabilise the market is paring losses across the commodity complex, helping resources stocks recover from an early sell-off.
  • Euro zone business growth at four-year high (Reuters) Business activity in the euro zone picked up at its fastest pace since mid-2011 this month, and far quicker than expected, as slowing growth in France following the Nov. 13 attacks was offset by a buoyant Germany.
  • Bond issuance in euros hits six-year high (FT) Corporate investment grade bond issuance in euros is heading for the highest annual level since 2009 as companies scramble to sell debt ahead of the expected launch of a second round of quantitative easing by the European Central Bank.

 Overnight markets

  • Overview: US 10yr note futures are lower -0.06% at 126-19, S&P 500 futures are down -0.12% at 2086.25, Crude oil futures are down -1.26% at 41.36$, Gold futures are down -0.36% at $1072.40, DXY is up +0.10 % at 99.65.

 US Economic Data

  • Chicago Fed National Activity Index missed expectations during October, coming in at -0.04 vs. 0.08 expected and down from September’s -0.29.
  • Existing home sales for September will be release at 9:00. US existing home sales or home resales is expected to modestly slid from previous recording of 5.55M for the month of September. Market expects US October’s home resales to stand at 5.39M.

Canadian Economic Data

  •  Bloomberg Nanos Canadian Confidence Index will be released today at 10:00am.

 

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, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230