cti2015header-morning comments web

Market Update

US tsys higher, yields 2-3 bps lower across the curve as oil prices remain under renewed pressure as likelihood off a deal to cut production at this Wednesday’s OPEC meeting remains uncertain, with Iran and Iraq proving difficult to persuade so far while Saudi doubts production cuts are even necessary. Core Euro bonds higher, flatter, yields 3-5bps lower also attributed to oil as well as buy stops on bund futures.  GOCs trading higher, outperforming tsys in the long end, curve 1bp flatter, GOC 10Y 1.54% (-2bps). Provis starting weaker, Ont 48s trading down at 95.5, keep an eye on Ont 46/26 roll heading into month end extension/cpn pmt, now 12.5bps , provi supply likely this week from Ont, NB & NF…

News headlines 

U.S. stock futures pull back after record-setting week (Reuters) U.S. stock index futures pulled back on Monday, after the three major indexes extended their post-election rally and closed at record highs. The three indexes closed higher for three weeks in a row, with the S&P 500 notching its seventh record close since Nov. 8. Oil prices were lower in choppy trading as the market grappled over the shaky prospect of OPEC producers being able to agree output cuts at a meeting on Wednesday aimed at reining in global oversupply.

Oil prices gyrate as OPEC heavyweights head to Vienna (Reuters) Oil prices edged higher on Monday, after falling as much as 2 percent in early trading, as the market grappled over the shaky prospect of major producers being able to agree output cuts at a meeting on Wednesday aimed at reining in global oversupply. Brent crude futures LCOc1 fell as far as 2 percent before clawing back to trade up 29 cents at $47.44 per barrel at 1008 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 also recouped early losses and were trading up 15 cents at $46.21 per barrel.

BOJ Has First Loss in Four Years on Hit From FX and Bonds (Bloomberg) The Bank of Japan had its first loss since Haruhiko Kuroda became governor after the value of foreign currency assets fell, it wrote down bond holdings and set aside more money to cover potential future losses on its holdings of government debt. The bank posted a net loss of 200.2 billion yen ($1.8 billion) in the six months through September, it said Monday.

OPEC Tries to Salvage Deal as Saudis Say Cut Isn’t Essential (Bloomberg) OPEC ministers flew to Moscow and officials in Vienna started another round of talks in an effort to salvage an agreement on production cuts, just as Saudi Arabia said a deal might not be necessary. With only two days to go before ministers from the Organization of Petroleum Exporting Countries try to finalize the first production decrease in eight years, the foundations for a deal are looking shaky.

Copper’s Scorching Rally May Hit Roadblock as Imports Drop (Bloomberg) Copper’s searing rally in November could hit a roadblock as China’s imports of the metal shrink. The world’s biggest consumer is making more copper domestically than ever before, using supplies of foreign ore concentrate, which is curbing demand for the refined metal. Overseas purchases of refined copper plunged to the lowest level in more than three years in October, contracting 45 percent from a year earlier, customs data showed Friday.

Brexit Impact Will Be Less Harsh Than Anticipated, OECD Says (Bloomberg) Brexit is going to cause the British economy to slow less than originally thought, according to the OECD. The Paris-based Organization for Economic Cooperation and Development revised up its U.K. growth forecasts to 2 percent from 1.8 percent this year, and to 1.2 percent from 1 percent in 2017, according to its November Economic Outlook. An inflation-induced pinch on consumer spending and lower investment are likely to drive the slowdown, it said, and those threats could prove more troublesome than expected.

Overnight markets      

Overview: US 10yr note futures are up 0.3245% at 125-20, S&P 500 futures are down -0.24% at 2206, Crude oil futures are up 1.24% at $46.63, Gold futures are up 0.77% at $1190.1, DXY is down -0.01% at 101.48, CAD/USD is down -0.69% at 0.7445.                                                                        

US Economic Data 

10:30 AM Dallas Fed Manufacturing Index, Nov, est. 1.5 (prior -1.5)

Canadian Economic Data

 There is no major economic data release 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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