Market Update
US tsys extending highs after more China headlines – ‘sticking points remain’ and rise in Oct retail inventories (0.3% vs 0.1%) 10Y 1.735% (-2bps), S&P futures unch. Gilts sharply higher, 10Y gilt 6bps lower @0.63% lowest since Nov1 despite lower demand for auction of GBP3bln 5Y bonds (b/c 2.16 vs 2.28 in Oct), polls showing Conservative lead over Labour in UK election shrinking. GOCs higher in line with tsys, no data until Friday’s Q3 GDP (1.3% exp). Rail strike likely to figure in next week’s BOC deliberations, with the accommodative outlook unlikely to shift from Oct, thou progress is being made in negotiations according to BN. In corps, Morguard priced $225mln 5Y @ 270 (tight end of guidance) , deal did not look cheap yet spds still finished 7bps narrower.
News headlines
U.S. Equity Futures Drift; Treasuries Edge Higher: Markets Wrap (Bloomberg) U.S. equity futures drifted with European stocks as investors searched for signs of progress in China’s comments about prospects for a “phase-one” trade deal. Treasuries and most European sovereign bonds edged higher.
TSX futures edge lower as investors remain cautious on trade deal (Reuters) Canada’s main stock index futures fell on Tuesday, as investors awaited concrete signs of any progress in trade talks between the United States and China.
Top U.S. and Chinese trade negotiators hold phone call, discuss core issues (Reuters) Top trade negotiators from China and the United States held a phone call on Tuesday morning, China’s Commerce Ministry said, as the two sides try to hammer out a preliminary “phase one” deal in a trade war that has dragged on for 16 months.
Oil Steadies on Signs of Trade-Talks Progress, Stockpile Drop (Bloomberg) Oil steadied on signs of progress in trade talks between the U.S. and China, and estimates that American crude inventories retreated for the first time in five weeks.
Scotiabank’s wealth management drive pays off with earnings lift (BNN) Bank of Nova Scotia is putting the spotlight on its global wealth-management business for good reason.
It’s not just trade hopes fueling the U.S. stocks rally (Reuters) Wall Street stocks have leap-frogged over a host of concerns, including a stall in corporate earnings and political controversy in Washington, on their way to record highs this month.
Alibaba’s Hong Kong shares rise 6.6% on debut in heavy volume (Reuters) Alibaba Group’s (BABA.N) (9988.HK) Hong Kong shares closed their first trading session up 6.6% from the issue price after this year’s largest stock sale.
World stocks edge off highs to await U.S.-China progress (Reuters) World stocks edged off their highest in almost two years on Tuesday, but kept record levels in sight, following fresh signs that the United States and China were working to end a trade war dragging on the global economy.
Fed’s Powell Says U.S. Economy’s Glass Is ‘More Than Half Full’ (Bloomberg) Federal Reserve Chairman Jerome Powell struck an upbeat tone in gauging the ability of policy makers to extend the record U.S. economic expansion, while signaling interest rates would probably remain on hold.
Market Overview: US 10yr note futures are up 0.084% at 129-20, S&P 500 futures are up 0.04% at 3134, Crude oil futures are up 0.33% at $58.2, Gold futures are down -0.12% at $1462.1, DXY is down -0.03% at 98.297, CAD/USD is up 0.07% at 0.7515.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.578% | 2 Year | 1.594% |
| 5 Year | 1.491% | 5 Year | 1.608% |
| 10 Year | 1.456% | 10 Year | 1.745% |
| 30 Year | 1.565% | 30 Year | 2.185% |
US Economic Data
| 08:30 AM | Advance Goods Trade Balance, Oct Survey: -$71.0b Actual: -$66.5b Prior: -$70.4b |
| Retail Inventories MoM, Oct Survey: 0.10% Actual: 0.30% Prior: 0.30% Revised 0.2% | |
| Wholesale Inventories MoM, Oct P Survey: 0.20% Actual: 0.20% Prior: -0.40% | |
| 09:00 AM | House Price Purchase Index QoQ, 3Q Survey: — Prior: 1.00% |
| FHFA House Price Index MoM, Sep Survey: 0.30% Prior: 0.20% | |
| S&P CoreLogic CS 20-City MoM SA, Sep Survey: 0.30% Prior: -0.16% | |
| S&P CoreLogic CS 20-City YoY NSA, Sep Survey: 2.01% Prior: 2.03% | |
| 10:00 AM | Richmond Fed Manufact. Index, Nov Survey: 5 Prior: 8 |
| New Home Sales, Oct Survey: 705k Prior: 701k | |
| New Home Sales MoM, Oct Survey: 0.60% Prior: -0.70% | |
| Conf. Board Consumer Confidence, Nov Survey: 127.0 Prior: 125.9 |
Canadian Economic Data
There is no Canadian economic data for today.
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