Commentaires
20/12/2019
Market Update
Tsys lower on low volume before Q3 GDP/PCE data, 10Y 1.93% (+1bp), US equity futures slightly positive , S&P +1.75, USD index at weekly high. The US 2s10s steepened yesterday to the widest since Nov 18 while 10Y breakevens are at the highest since July. Core EGBs lower , UK Q3 GDP revised higher to 0.4% from 0.3% due to stronger services and exports. GOC yields 1bp higher before Oct Retail Sales (0.5% exp). Big move in 30Y breakevens yest, 4bps in line with move in US breakevens.
News headlines
U.S. Futures Drift, Europe Stocks Gain; Bonds Slip: Markets Wrap (Bloomberg) U.S. equity futures fluctuated in a tight range while European stocks climbed as investors counted down to the holiday season. The dollar edged higher and Treasuries declined.
TSX futures gain on new North American trade deal (Reuters) Futures for Canada’s main stock index rose on Friday, following the approval of a new trade deal between the United States and its neighbors Canada and Mexico.
Oil Heads for Third Weekly Gain on U.S.-China Trade Optimism (Bloomberg) Oil is on track for a third weekly advance as the U.S. and China made progress toward a phase-one trade deal, supporting the outlook for fuel demand.
Wall Street Week Ahead: History suggests rally may slow for U.S. stocks in ’20 (Reuters) The outsized rally in the U.S. stock market this year may give way to a more muted performance in 2020 if history is any guide.
Two deals in pocket but no holiday cheer for U.S. trade chief Lighthizer (Reuters) U.S. Trade Representative Robert Lighthizer was looking forward to some holiday peace and quiet after wrapping up trade deals with the United States’ most important trading partners – China, Mexico, and Canada – last week.
China can fulfil $40 billion U.S. farm purchase pledge: consultancy (Reuters) China will make good on a pledge to purchase more than $40 billion per year of U.S. agricultural products under the recently agreed Phase 1 trade deal between the two countries, China’s top agriculture consultancy said on Friday.
UK economy’s growth in third-quarter revised up, smallest current account gap since 2012 (Reuters) Britain’s economy grew a little faster in the third quarter than first estimated and the country’s current account deficit shrank to its smallest since 2012, a small boost ahead of what looks set to be a sluggish end to the year ahead of Brexit.
UK PM Johnson: There will be no alignment with EU rules in future relationship (Reuters) British Prime Minister Boris Johnson said on Friday there would be no alignment with European Union rules under the terms of the free trade deal he wants to strike with the bloc next year.
House follows Trump impeachment by passing NAFTA overhaul (BNN) The day after voting to impeach President Donald Trump, the House approved his top 2019 legislative priority by advancing the U.S.-Mexico-Canada trade accord.
Market Overview: US 10yr note futures are down -0.17% at 128-03, S&P 500 futures are up 0.06% at 3213.75, Crude oil futures are down -0.33% at $60.98, Gold futures are down -0.09% at $1483.1, DXY is up 0.14% at 97.512, CAD/USD is up 0.14% at 0.7608.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.704% | 2 Year | 1.636% |
| 5 Year | 1.683% | 5 Year | 1.744% |
| 10 Year | 1.67% | 10 Year | 1.931% |
| 30 Year | 1.722% | 30 Year | 2.36% |
US Economic Data
| 08:30 AM | GDP Annualized QoQ, 3Q T Survey: 2.10% Prior: 2.10% |
| Personal Consumption, 3Q T Survey: 2.90% Prior: 2.90% | |
| GDP Price Index, 3Q T Survey: 1.80% Prior: 1.80% | |
| Core PCE QoQ, 3Q T Survey: 2.10% Prior: 2.10% | |
| 10:00 AM | Personal Income, Nov Survey: 0.30% Prior: 0.00% |
| Personal Spending, Nov Survey: 0.40% Prior: 0.30% | |
| Real Personal Spending, Nov Survey: 0.20% Prior: 0.10% | |
| PCE Deflator MoM, Nov Survey: 0.20% Prior: 0.20% | |
| PCE Deflator YoY, Nov Survey: 1.40% Prior: 1.30% | |
| PCE Core Deflator MoM, Nov Survey: 0.10% Prior: 0.10% | |
| PCE Core Deflator YoY, Nov Survey: 1.50% Prior: 1.60% | |
| U. of Mich. Sentiment, Dec F Survey: 99.2 Prior: 99.2 | |
| 11:00 AM | Kansas City Fed Manf. Activity, Dec Survey: -3 Prior: -3 |
Canadian Economic Data
| 08:30 AM | Retail Sales MoM, Oct Survey: 0.50% Prior: -0.10% |
| Retail Sales Ex Auto MoM, Oct Survey: 0.20% Prior: 0.20% | |
| New Housing Price Index MoM, Nov Survey: 0.10% Prior: — | |
| New Housing Price Index YoY, Nov Survey: 0.00% Prior: — |
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
19/12/2019
Market Update
Tsys trading weaker across the curve on above avg volume (420k), 10Y 1.935% (+2bps), highest since August 1st. 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
18/12/2019
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