Commentaires matinaux

Market Update

Tsys trading weaker across the curve on above avg volume (420k), 10Y 1.935% (+2bps), highest since August 1^st. Prices off the lows after a weak Dec Phili Fed (0.3 vs 8.0). Core Euro bonds also lower, 10Y gilt 4bps higher -BOE left rates, QE unchanged in 7-2 vote. The MPC noted that an increase in rates may be needed assuming its forecast of smooth Brexit and global growth pan out.  Limited reaction to Trump’s widely expected impeachment, along party lines. GOCs off the lows with tsys, Oct Wholesale Sales fell 1.1% vs -0.4% exp.  Yesterday’s CPI release saw the core measure rise to 2.4%, the highest since 2009 which is likely to keep the BOC on the sidelines over the near term.

News headlines

Bonds Drop as Stocks Fluctuate Near Record Highs: Markets Wrap (Bloomberg) Government bonds fell around the world as a string of central banks either kept their benchmark interest rates steady or raised them. U.S. equity-index futures drifted while stocks fluctuated in Europe, leaving shares in major markets lingering close to record highs.

TSX futures rise as oil prices gain (Reuters) Futures for Canada’s main stock index rose on Thursday, as oil prices rose on falling U.S. crude inventories.

Oil Rally Stutters as Plentiful Gasoline Muddies Demand Outlook (Bloomberg) Oil hovered near $61 a barrel for a second day after capping its longest streak of gains in almost two months as traders weighed bearish signs of swelling U.S. fuel inventories against a decline in domestic crude stockpiles.

China says in touch with U.S. on signing of Phase 1 trade deal (Reuters) China and the United States are in touch over the signing of their Phase 1 trade deal, China’s commerce ministry said, which will see lower U.S. tariffs on Chinese goods and higher Chinese purchases of U.S. farm, energy and manufactured goods.

Cautious UK shoppers send retail sales growth to 19-month low (Reuters) British shoppers kept a tight grip on their wallets last month as retail sales grew at their slowest annual pace since April 2018 amid uncertainty about Brexit and December’s election.

Stocks near record highs, Sweden ends negative rates (Reuters) World stocks drifted down from the week’s record highs on Thursday, while the crown gained as Sweden’s central bank became the first to raise interest rates from negative territory.

Bank of England holds steady on rates, awaits impact of Johnson’s election win (Reuters) The Bank of England kept interest rates steady on Thursday, saying it was too soon to gauge how much Prime Minister Boris Johnson’s election victory would lift the Brexit uncertainty that has hung over the economy.

Brazil raises 2020 GDP growth forecast, inflation seen stable (Reuters) Brazil’s central bank on Thursday raised its 2020 gross domestic product growth forecast to 2.2% in its quarterly inflation report from 1.8% previously, but cautioned it was conditional on continued progress on economic reforms.

Market Overview: US 10yr note futures are down -0.158% at 127-31, S&P 500 futures are down -0.07% at 3197, Crude oil futures are down -0.05% at $60.9, Gold futures are up 0.01% at $1478.9, DXY is down -0.01% at 97.394, CAD/USD is up 0.03% at 0.7622.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.742%	2 Year	1.641%
5 Year	1.728%	5 Year	1.755%
10 Year	1.722%	10 Year	1.945%
30 Year	1.775%	30 Year	2.374%

US Economic Data

08:30 AM	Current Account Balance, 3Q  Survey: -$122.0b Actual: -$124.1b  Prior: -$128.2b
	Philadelphia Fed Business Outlook, Dec  Survey: 8.0 Actual: 0.3 Prior: 10.4
	Initial Jobless Claims, Dec 14  Survey: 225k Actual: 234k Prior: 252k
	Continuing Claims, Dec 7 Survey: 1676k Actual: 1722k  Prior: 1667k
09:45 AM	Bloomberg Consumer Comfort, Dec 15  Survey: —  Prior: 62.1
	Bloomberg Economic Expectations, Dec  Survey: —  Prior: 51.5
10:00 AM	Leading Index, Nov  Survey: 0.10%  Prior: -0.10%
	Existing Home Sales, Nov  Survey: 5.44m  Prior: 5.46m
	Existing Home Sales MoM, Nov  Survey: -0.40%  Prior: 1.90%

Canadian Economic Data

08:30 AM	Wholesale Trade Sales MoM, Oct  Survey: -0.40% Actual: -1.10%  Prior: 1.00%
	ADP Canada Releases Nov. Payroll Estimates

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

Market Update

US tsys lower trading lower, 10Y 1.89% (+1bp), muted volume in TY futures (285k), US equity futures now higher (S&P +2.25).  Bunds lower on stronger IFO, 10Y edging closer to high yield set in Nov (-0.25%).  GOCs lower, wider vs tsys before CPI  and 2Y auction.

News headlines

U.S. Futures, Europe Stocks Fluctuate; Bonds Mixed: Markets Wrap (Bloomberg) U.S. equity futures and European stocks drifted on Wednesday as investors digested a flurry of corporate news amid a lull in trade-war headlines. Bonds were mixed and the pound weakened.

TSX futures down on crude inventory build up (Reuters) Futures for Canada’s main stock index fell on Wednesday, after U.S. industry data showed a surprise build-up in crude inventories.

Wage gains could be fleeting in Canada given productivity woes (BNN) After a decade of middling wage growth, Canadian workers are finally starting to see significantly bigger paychecks. The question is whether those gains are sustainable.

Saturday before Christmas expected to be the biggest U.S. shopping day of 2019 (Reuters) U.S. retailers are expected to ring up record sales on Super Saturday this year, as fewer days than usual between Thanksgiving and Christmas have squeezed shoppers to finish their purchases.

Where’s the risk? U.S. fund managers bet on bull run in 2020 (Reuters) With the UK election results giving some certainty to the Brexit process, a U.S.-China trade deal all but signed and the Federal Reserve signaling that it will stand steady for the foreseeable future, there are three fewer hurdles standing in the way of global equities extending their record run into 2020.

World shares remain near record peaks (Reuters) World stocks remained just off record highs on Wednesday after climbing for five straight sessions, while Britain’s pound nursed heavy losses as Brexit uncertainty returned.

Fed’s Brainard: Facebook’s Libra faces ‘core set’ of regulatory hurdles (Reuters) U.S. Federal Reserve Governor Lael Brainard launched a broadside against Facebook’s Libra digital currency project on Wednesday, saying it faces a “core set of legal and regulatory challenges” including clarity about how it would be tied to some basket of underlying assets.

Ambition of EU-UK deal depends on regulatory alignment: EU’s Barnier (Reuters) The European Union’s willingness to offer a comprehensive free trade agreement to Britain after Brexit will depend on how ready Britain is to maintain EU standards and regulations, the EU’s chief Brexit negotiator said on Wednesday.

Market Overview: US 10yr note futures are down -0.024% at 128-14, S&P 500 futures are up 0.05% at 3197, Crude oil futures are down -0.48% at $60.65, Gold futures are down -0.18% at $1477.9, DXY is up 0.18% at 97.395, CAD/USD is down -0.03% at 0.7601.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.709%	2 Year	1.633%
5 Year	1.662%	5 Year	1.713%
10 Year	1.655%	10 Year	1.887%
30 Year	1.733%	30 Year	2.313%

US Economic Data

07:00 AM

MBA Mortgage Applications, Dec 13 Survey: —  Actual: -5.00% Prior: 3.80%

Canadian Economic Data

08:30 AM	Teranet/National Bank HPI MoM, Nov  Survey: —  Prior: -0.10%
	Teranet/National Bank HPI YoY, Nov  Survey: —  Prior: 1.00%
	CPI NSA MoM, Nov  Survey: -0.10%  Prior: 0.30%
	CPI YoY, Nov  Survey: 2.20%  Prior: 1.90%
	Consumer Price Index, Nov  Survey: 136.5  Prior: 136.6

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

Market Update

US tsys trading slightly higher on low volume in TY futures (225k), 10Y 1.86% (-1bp).  UK gilts leading EGBs higher, yields 2-5bps lower and the GBP -1.0% as Boris Johnson looks to amend the Brexit bill to rule out any extension of the post-Brexit transition period beyond Dec 2020. UK Oct employment data showed 24k rise vs -14k exp with the unemployment rate at 3.8% vs 3.9% in Sep.  US data includes Nov Housing Starts and IP/Cap Util data. Fed speakers Kaplan and Williams this aft.  In Canada GOCs are higher in line with tsys, 10Y 1.62%.  Two year auction tomorrow – reopening of the Feb 22s for $3bln, with the Feb 22/2Y roll -0.7bps. Active day in primary issuance yest with $2.4bln across three issues – $1.5bln RY  NVCC 10NC5 @ 129 , $750mln NA 5Y @94,  $150mln Crombie long 7Y @ 225 – the latter 10x oversubscribed.

News headlines

Global Stock Rally Stalls as U.S. Futures Struggle: Markets Wrap (Bloomberg) U.S. stock futures struggled for direction while European shares fell on Tuesday as the global rally in equities eased. With the sugar rush of a partial trade deal between the two largest economies fading, investors pushed up the dollar and Treasuries.

TSX set to break three-day win streak (Reuters) Canada stocks futures fell on Tuesday, putting the main index on track to break a three-day winning streak, as optimism over an interim U.S.-China trade deal waned.

Oil Holds Near $60 as Easing U.S.-China Tension Aids Outlook (Bloomberg) Oil held near $60 a barrel on optimism the partial U.S.-China trade pact will bolster demand, while analysts estimated a pullback in American crude stockpiles.

Exclusive: U.S. initial crackdown on advanced tech exports appears more restrained than feared (Reuters) The Trump administration is finalizing a set of narrow rules to limit exports of sophisticated technology to adversaries like China, a document seen by Reuters shows, in a boon to U.S. industry that feared a much tougher crackdown on sales abroad.

Finance’s final frontier? British watchdog probes data sharing (Reuters) Britain’s Financial Conduct Authority (FCA) is investigating whether sharing data with outside competitors could be extended beyond banks to savings, insurance, mortgages, investments, pensions and consumer credit to increase innovation and choice.

UK jobs growth resumes, unemployment rate near 45-year low (Reuters) The number of people in work in Britain unexpectedly rose in the three months before the missed Oct. 31 deadline for Brexit, according to data which suggests the labor market was retaining some of its strength.

ECB may need more flexibility around inflation target: Müller (Reuters) The European Central Bank should have greater flexibility around its inflation goal and could consider targeting price growth in a band, Estonian central bank chief Madis Müller said on Tuesday.

Pound and stocks flop as Brexit fears resurface (Reuters) European stocks skidded off record highs and sterling dropped more than 1% on Thursday, as reports that Britain’s prime minister was ready to play rough in Brexit talks brought December’s cross-market rally to a halt.

Exclusive: Russian officials in talks to transfer central bank’s Sberbank stake – sources (Reuters) Russian officials are in talks to transfer the central bank’s stake in Sberbank (SBER.MM), the country’s top bank, to another state entity, four sources said, amid growing unease about the central bank’s role as both owner and supervisor.

Market Overview: US 10yr note futures are up 0.158% at 128-20, S&P 500 futures are down -0.01% at 3198.25, Crude oil futures are up 0.28% at $60.38, Gold futures are up 0.2% at $1483.5, DXY is up 0.03% at 97.048, CAD/USD is up 0.07% at 0.7595.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.689%	2 Year	1.631%
5 Year	1.63%	5 Year	1.695%
10 Year	1.625%	10 Year	1.863%
30 Year	1.714%	30 Year	2.28%

US Economic Data

08:30 AM	Housing Starts, Nov  Survey: 1345k Actual: 1365k Prior: 1314k
	Building Permits, Nov  Survey: 1418k Actual: 1482k Prior: 1461k
	Housing Starts MoM, Nov  Survey: 2.30% Actual: 3.20% Prior: 3.80%
	Building Permits MoM, Nov  Survey: -2.90% Actual: 1.40% Prior: 5.00%
09:15 AM	Industrial Production MoM, Nov  Survey: 0.80%  Prior: -0.80%
	Manufacturing (SIC) Production, Nov  Survey: 0.90%  Prior: -0.60%
	Capacity Utilization, Nov  Survey: 77.40%  Prior: 76.70%
10:00 AM	JOLTS Job Openings, Oct  Survey: 7009  Prior: 7024

Canadian Economic Data

08:30 AM

Manufacturing Sales MoM, Oct  Survey: 0.00% Actual: -0.70%  Prior: -0.20%

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