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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

Market Update

US tsys trading weaker, yields 1.5-2.5bps higher with the 10Y 1.845% (+2.3bps), avg volume in TY futures (350k). Equity futures higher, S&P +14 – relief with phase one trade deal confirmed Friday and UK election decided. Core EGBs outperforming after misses in French, German and UK PMIs, 10Y bund/tsy spread 4bps wider.  Focus this week in terms of US data Philly Fed Thurs and Q3 GDP Friday. GOCs lower, 2bps wider vs tsys, 10Y 1.625%.  Canadian data this week highlighted by CPI Wednesday and Retail Sales Friday.

News headlines

U.S. Futures Climb as European Stocks Hit Record: Markets Wrap (Bloomberg) U.S. equity futures and European stocks started the week on the front foot amid hopes a partial trade deal between America and China eases a key risk for investors heading into year-end. Treasuries slipped.

TSX futures rise on trade optimism (Reuters) Canada’s main stock index futures rose on Monday, following a preliminary trade agreement between the United States and China, which was announced on Friday.

Oil Near Three-Month High on Cautious Optimism Over Trade Deal (Bloomberg) Oil steadied near a three-month high on cautious optimism that a preliminary trade deal between the U.S. and China will support global fuel consumption.

U.S. top trade negotiator praises deal, China remains cautious (Reuters) U.S. President Donald Trump’s top trade negotiator praised a “phase one” U.S.-China trade deal which is expected to nearly double U.S. exports to China over the next two years, while China remained cautious ahead of the signing of the agreement.

Euro zone business growth stayed weak in December: flash PMIs (Reuters) Euro zone business growth remained weak in December, with tepid foreign demand exacerbating a contraction in manufacturing and offsetting a slight pick-up in services activity, although some analysts saw signs of stabilization.

Costco in Caracas: how Florida goods flood Venezuelan stores (Reuters) While U.S. President Donald Trump wants to drive Venezuela’s socialist ruler out of power with economic sanctions, there has in fact been a burgeoning influx of American-bought goods from Nutella spread to Oreo cookies.

ECB has minor impact on inequality: Lane (Reuters) The European Central Bank’s monetary policy has relatively little impact on inequality, Philip Lane, the bank’s chief economist said, responding in part to criticism that large scale asset buys widen the social gap.

China’s factory, retail sectors shine as trade tensions thaw (Reuters) Growth in China’s industrial and retail sectors beat expectations in November, as government support propped up demand in the world’s second-largest economy and amid easing trade hostilities with Washington.

Market Overview: US 10yr note futures are down -0.242% at 128-23, S&P 500 futures are up 0.46% at 3190, Crude oil futures are down 0% at $60.07, Gold futures are down -0.01% at $1481, DXY is down -0.22% at 96.961, CAD/USD is down -0.39% at 0.7625.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.686%	2 Year	1.628%
5 Year	1.628%	5 Year	1.687%
10 Year	1.625%	10 Year	1.854%
30 Year	1.719%	30 Year	2.278%

US Economic Data

08:30 AM	Empire Manufacturing, Dec  Survey: 4.0  Prior: 2.9
09:45 AM	Markit US Composite PMI, Dec P  Survey: —  Prior: 52.0
	Markit US Manufacturing PMI, Dec P  Survey: 52.6  Prior: 52.6
	Markit US Services PMI, Dec P  Survey: 52.0  Prior: 51.6
10:00 AM	NAHB Housing Market Index, Dec  Survey: 70  Prior: 70
04:00 PM	Net Long-term TIC Flows, Oct  Survey: —  Prior: $49.5b
	Total Net TIC Flows, Oct  Survey: —  Prior: -$37.6b

Canadian Economic Data

08:30 AM	Int’l Securities Transactions, Oct  Survey: —  Prior: 4.76b
09:00 AM	Existing Home Sales MoM, Nov  Survey: —  Prior: 0.00%
10:00 AM	Bloomberg Nanos Confidence, Dec 13  Survey: —  Prior: 55.1

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