Market Update

US tsys trading lower, yields 0.5-1.5bp higher led by the 7Y , with the 10Y 1.785 (+1.5bps), heavier volume in TY futures inflated by Dec/Mar roll.  Equity futures higher, S&P +7.25, crude slightly higher 57.88 close to top of three month range. Headline in Global Times over the weekend suggested China and the US were close to phase one trade deal (MNI). Core EGBs mixed, gilts higher, bunds lower despite slightly weaker German IFO expectations. GOCs lower, wider vs tsys after stronger Sep Wholesale Trade (1.0% vs unch). Q3 GDP on Friday the focus for the week (1.3% exp)

News headlines

Stocks Climb After China’s IP Move; Treasuries Dip: Markets Wrap (Bloomberg) U.S. equity futures climbed along with stocks globally as investors digested China’s decision to tighten intellectual property rules, a move that may boost the chances of a trade deal between the world’s largest economies. Treasuries, the yen and gold declined.

CANADA STOCKS-TSX futures rise on hopes of U.S.-China phase-one trade deal (Reuters) Canada’s main stock index futures were up on Monday over signs that the U.S. and China would agree on a phase-one trade deal by year end.

Oil Steady Near $58 on Glimmer of Progress in Trade War Talks (Bloomberg) Oil steadied near $58 a barrel as China made a concession that could help resolve trade tensions with the U.S. that have weighed on the global economy and fuel demand.

No ‘phase two’ U.S.-China deal on the horizon, officials say (Reuters) An ambitious “phase two” trade deal between the United States and China is looking less likely as the two countries struggle to strike a preliminary “phase one” agreement, according to U.S. and Beijing officials, lawmakers and trade experts.

Chinese importers scoop up Brazilian soybeans amid U.S. trade uncertainty (Reuters) Chinese buyers scooped up at least 20 cargoes of Brazilian soybeans last week due to uncertainty over a trade deal with the United States that sent them rushing to lock in supplies, traders said on Monday.

China to raise penalties on IP theft in trade war compromise (BNN) China said it will raise penalties on violations of intellectual property rights in an attempt to address one of the sticking points in trade talks with the U.S.

China central bank warns high financial risks amid rising economic headwinds (Reuters) China needs to resolve outstanding financial risks, and must counter risks from “abnormal” market fluctuations that stem from external shocks, said the central bank on Monday, as Beijing prioritizes financial stability amid increasing challenges.

Layoffs hit farmers, chemical firms as CN Rail strike continues (BNN) Workers are receiving layoff notices and chemical companies face shutdowns as the effects of Canada’s largest rail strike in a decade ripples through the economy.

Market Overview: US 10yr note futures are down -0.133% at 129-09, S&P 500 futures are up 0.22% at 3118.25, Crude oil futures are down -0.21% at $57.65, Gold futures are down -0.57% at $1462.1, DXY is up 0.06% at 98.329, CAD/USD is up 0.05% at 0.7514.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.588% 2 Year 1.644%
5 Year 1.513% 5 Year 1.647%
10 Year 1.487% 10 Year 1.788%
30 Year 1.593% 30 Year 2.23%

US Economic Data

08:30 AM  Chicago Fed Nat Activity Index, Oct  Survey: -0.20 Actual: -0.71 Prior: -0.45
10:30 AM Dallas Fed Manf. Activity, Nov  Survey: -3.7  Prior: -5.1

Canadian Economic Data

08:30 AM Wholesale Trade Sales MoM, Sep  Survey: 0.00% Actual: 1.00% Prior: -1.20%
10:00 AM Bloomberg Nanos Confidence, Nov 22  Survey: —  Prior: 56.2

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