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Market Update

US tsys trading higher, heavy volume in TY futures (975k), with a lot of positions taken post UK election, considering size of Conservative majority came as a surprise. US retail sales weaker than exp, ex- Auto & Gas 0.0% vs 0.4% exp. UK gilts erasing most of early losses after gapping 80 ticks lower after the election results, with the pound also giving up some early gains. Equity futures higher, S&P +9, crude higher for 2nd day approaching $60 for first time since Sep. China press conference on phase one trade deal with US scheduled for 9:30ET. GOCs higher in line with tsys post 8:30 data, 10Y 1.65% – yields gapping higher yest on positive risk sentiment, while provincials are at narrows for the year.

News headlines

Johnson election victory propels Britain toward swift Brexit (Reuters)Britain was speeding toward Brexit on Friday after Prime Minister Boris Johnson won a crushing election victory, ending three years of uncertainty since the country decided to leave the bloc.

New NAFTA deal lifts cloud of uncertainty hanging over Canadian business: Poloz (FP) Bank of Canada Governor Stephen Poloz suggested Thursday that the ratification of a new North American free-trade deal is key to finally eliminating uncertainty that has hovered over businesses trying to make investment decisions since the election of U.S. President Donald Trump.

Futures up on trade deal hopes; tariff deadline closes in (Reuters) U.S. stock index futures rose on Friday on hopes that the United States and China could reach an initial deal to end their trade war after Washington set its terms for an agreement, just days before fresh levies on Chinese goods kick in.

U.S. sets China trade deal terms, sources say, but Beijing mum (Reuters) Washington has set its terms for a trade deal with China, offering to suspend some tariffs on Chinese goods and cut others in exchange for Beijing’s buying more American farm goods, U.S. sources said on Thursday.

Rattling Republicans, U.S. House committee delays impeachment vote to Friday (Reuters) Democrats delayed an impeachment vote by a U.S. House Committee just before midnight, incensing Republicans and setting up a Friday showdown over President Donald Trump’s future.

U.S. Congress negotiators, White House set tentative deal on fiscal 2020 funding (Reuters) Senior negotiators in the U.S. Congress on Thursday reached a tentative deal with the White House on a series of bills to fund federal agencies through Sept. 30, 2020, which would avert partial government shutdowns next week.

Desmarais brothers to step down as CEOs in overhaul of Power Corp (FP) Andre Desmarais and Paul Desmarais Jr. are stepping down as co-chief executive officers of Power Corp. of Canada as part of a massive reorganization at one of the country’s largest financial services firms.

Market Overview: US 10yr note futures are up 0.085% at 128-16, S&P 500 futures are up 0.24% at 3178.75, Crude oil futures are up 0.93% at $59.73, Gold futures are up 0.21% at $1475.4, DXY is down -0.55% at 96.862, CAD/USD is down -0.14% at 0.7596.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.688%	2 Year	1.628%
5 Year	1.645%	5 Year	1.706%
10 Year	1.654%	10 Year	1.877%
30 Year	1.742%	30 Year	2.299%

US Economic Data

08:30 AM	Import Price Index MoM, Nov  Survey: 0.20%  Actual: 0.20% Prior: -0.50%
	Import Price Index ex Petroleum MoM, Nov  Survey: -0.10%  Actual: 0.20% Prior: -0.10%
	Import Price Index YoY, Nov  Survey: -1.20%  Actual: -1.30% Prior: -3.00%
	Export Price Index MoM, Nov  Survey: 0.10%  Actual: 0.20% Prior: -0.10%
	Export Price Index YoY, Nov  Survey: —  Actual: -1.30% Prior: -2.20%
	Retail Sales Advance MoM, Nov  Survey: 0.50%  Actual: 0.20% Prior: 0.30%
	Retail Sales Ex Auto MoM, Nov  Survey: 0.40%  Actual: 0.10% Prior: 0.20%
	Retail Sales Ex Auto and Gas, Nov  Survey: 0.40%  Actual: 0.00% Prior: 0.10%
	Retail Sales Control Group, Nov  Survey: 0.30%  Actual: 0.10% Prior: 0.30%
09:45 AM	Bloomberg Dec. United States Economic Survey
10:00 AM	Business Inventories, Oct  Survey: 0.20%  Prior: 0.00%

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

Market Update

US tsys trading slightly lower, 10Y 1.80% (+0.5bps), avg volume in TY futures (300k) and narrow o/n range. ECB left marginal lending rate at 0.25% as exp, bond buying to continue, Christine Lagarde first press conference at 9:00ET. Core EGBs higher led by 10Y gilts on election day, pricing in risk of a minority Conservative govt, so called “hung parliament”.  GOCs slightly higher in the short end, Can/US close to recent wides, retracing last Friday’s employment rally. Telus priced $900mln 2 part 10s & longs (158 & 230), bonds closing unch. This morning CHT prices 5Y deal in the area of 27 bps (now 26.5/26)

News headlines

U.S. Futures, Stocks Swing; Bonds Rise After ECB: Markets Wrap (Bloomberg) U.S. equity futures fluctuated alongside stocks in Europe on Thursday as investors digested the latest signals from some of the world’s major central banks. The euro held steady and bonds in the region climbed as European policy makers kept rates unchanged.

CANADA STOCKS-TSX futures up as oil prices rise (Reuters) Futures for Canada’s main stock index were marginally higher on Thursday, as oil prices rose after OPEC forecast a supply deficit next year.

Oil Rebounds Though Outlook Remains Clouded by Oversupply (Bloomberg) Oil rebounded from the previous session’s loss, though the outlook remained clouded by rising U.S. stockpiles and concern that OPEC and its allies aren’t taking enough action to balance the market.

Lagarde’s ECB Keeps Policy on Hold as Strategy Review Looms (Bloomberg) The European Central Bank kept monetary stimulus unchanged at President Christine Lagarde’s first policy meeting, shifting the focus to when she’ll announce her review of the institution’s strategy for safeguarding the euro-zone economy.

Wall Street, Fed prep to avoid year end disruption in repo markets (Reuters) With memories of September’s historic spike in short-term funding costs still raw, Wall Street and the Federal Reserve are gearing up for another potential cash crunch at year end.

‘Black Swan’ index flashes yellow: Wall Street is not scared (Reuters) The options-based Black Swan index may be signaling surging demand from investors for protection against a stock market crash, but Wall Street analysts see little reason to panic.

Aramco shares closing price on Thursday put value slightly below $2 trillion (Reuters) Saudi Aramco’s (2222.SE) shares closed at 36.8 Saudi riyals on Thursday, putting the company’s market value slightly below $2 trillion.

China says in close communication with U.S. on trade as fresh tariffs loom (Reuters) China and the United States are in close communication on trade, its commerce ministry said on Thursday, declining to comment on possible retaliatory steps if Washington imposes more tariffs on Chinese goods this weekend.

WTO appeals judges to stay on to complete several decisions: WTO official (Reuters) World Trade Organization (WTO) judges will complete decisions on three pending appeals for which hearings have been held – despite the collapse of the Appellate Body earlier this week – a WTO official said on Thursday.

New Nafta Leaves Winners and Losers Across North America (Bloomberg) Companies, workers and lawmakers in three countries have spent the past year in limbo awaiting final touches on the U.S.-Mexico-Canada free-trade agreement. Now they have a better sense of who won — and who lost.

Market Overview: US 10yr note futures are down -0.036% at 129-08, S&P 500 futures are down -0.09% at 3140.25, Crude oil futures are up 0.53% at $59.07, Gold futures are up 0.44% at $1481.5, DXY is up 0.03% at 97.161, CAD/USD is up 0.05% at 0.7588.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.658%	2 Year	1.603%
5 Year	1.595%	5 Year	1.635%
10 Year	1.582%	10 Year	1.795%
30 Year	1.68%	30 Year	2.233%

US Economic Data

08:30 AM	PPI Final Demand MoM, Nov  Survey: 0.20%  Prior: 0.40%
	PPI Ex Food and Energy MoM, Nov  Survey: 0.20%  Prior: 0.30%
	PPI Final Demand YoY, Nov  Survey: 1.30%  Prior: 1.10%
	PPI Ex Food and Energy YoY, Nov  Survey: 1.70%  Prior: 1.60%
	Initial Jobless Claims, Dec 7  Survey: 214k  Prior: 203k
	Continuing Claims, Nov 30  Survey: 1678k  Prior: 1693k
09:45 AM	Bloomberg Consumer Comfort, Dec 8  Survey: —  Prior: 61.7
12:00 PM	Household Change in Net Worth, 3Q  Survey: —  Prior: $1830b

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

Market Update

US tsys trading higher, curve flatter, 10Y 1.83% (-1.5bps), avg volume in TY futures before  Nov CPI (0.2%/2.0% y/y exp) and FOMC this afternoon..  Earlier equity weakness has reversed with S&P futures +3.0. EGBs also pulling back after earlier strength as equities rebound. Gilts outperforming and GBP taking leg lower after latest YouGov poll shows narrower lead for Conservatives, who are still expected to form a majority. GOCs unch before CAP Util. data at 8:30. 5Y CMB expected to launch this morning , reopening of Dec 2024s (27/26 on screen).

News headlines

U.S. Futures Fluctuate Before Fed; Bonds Advance: Markets Wrap (Bloomberg) U.S. equity futures fluctuated with stocks before the Federal Reserve’s final policy decision of the year and amid lingering uncertainty over the progress of trade negotiations between America and China. Treasuries advanced.

TSX futures inch higher as gold prices rise (Reuters) Canada’s main stock index futures edged up on Wednesday, boosted by higher gold prices as investors hedged against uncertainties around threats of new U.S. tariffs on Chinese goods.

Oil Falls From 12-Week High as Report Shows U.S. Stockpile Build (Bloomberg) Oil retreated from its highest close in almost three months after an industry report showed American crude inventories expanded last week, adding to signs that supplies will remain abundant next year.

Canada, Mexico, U.S. sign changes to new NAFTA (BNN) House Democrats embraced the U.S.-Mexico-Canada trade agreement after securing key revisions and announced plans to vote on the deal next week, putting President Donald Trump closer to a political win as he heads into the 2020 election.

Mexican businesses want clarity on details of USMCA trade deal (Reuters) After the initial euphoria had subsided, Mexican business leaders emerged bruised and resigned to a new stricter trade deal with the United States and Canada that could usher in more intrusive enforcement of labor rules in Mexico.

Focus squarely on Trump as Dec 15 tariffs loom in US-China trade war (Reuters) U.S. President Donald Trump has days to decide whether to impose tariffs on nearly $160 billion in Chinese consumer goods just weeks before Christmas, a move that could be unwelcome in both the United States and China.

Aramco IPO to help Saudi economy shift from oil: finance minister (Reuters) Saudi Aramco’s listing will boost the kingdom’s efforts to diversify from oil as the bulk of proceeds will be injected in domestic projects, while the global buzz surrounding the deal will help lure foreign capital, the finance minister said.

Exclusive: U.S. Army will fund rare earths plant for weapons development (Reuters) The U.S. Army plans to fund construction of rare earths processing facilities, part of an urgent push by Washington to secure domestic supply of the minerals used to make military weapons and electronics, according to a government document seen by Reuters.

What’s at stake for Britain’s economy in election? (Reuters) The two main parties in Britain’s election on Thursday offer contrasting plans on spending, tax, the role of the state, trade unions and Brexit.

Market Overview: US 10yr note futures are up 0.012% at 128-30, S&P 500 futures are up 0.1% at 3139, Crude oil futures are down -0.54% at $58.92, Gold futures are up 0.14% at $1470.2, DXY is up 0.15% at 97.559, CAD/USD is up 0.07% at 0.7554.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.668%	2 Year	1.646%
5 Year	1.613%	5 Year	1.678%
10 Year	1.599%	10 Year	1.828%
30 Year	1.701%	30 Year	2.249%

US Economic Data

07:00 AM	MBA Mortgage Applications, Dec 6  Survey: —  Actual: 3.80% Prior: -9.20%
08:30 AM	CPI MoM, Nov  Survey: 0.20%  Prior: 0.40%
	CPI Ex Food and Energy MoM, Nov  Survey: 0.20%  Prior: 0.20%
	CPI YoY, Nov  Survey: 2.00%  Prior: 1.80%
	CPI Ex Food and Energy YoY, Nov  Survey: 2.30%  Prior: 2.30%
	CPI Core Index SA, Nov  Survey: 265.476 Prior: 265.011
	CPI Index NSA, Nov  Survey: 257.213  Prior: 257.346
	Real Avg Weekly Earnings YoY, Nov  Survey: —  Prior: 0.90%
	Real Avg Hourly Earning YoY, Nov  Survey: —  Prior: 1.20%
02:00 PM	FOMC Rate Decision (Upper Bound), Dec 11  Survey: 1.75%  Prior: 1.75%
	FOMC Rate Decision (Lower Bound), Dec 11  Survey: 1.50%  Prior: 1.50%
	Interest Rate on Excess Reserves, Dec 12  Survey: 1.55%  Prior: 1.55%
	Monthly Budget Statement, Nov  Survey: -$206.2b  Prior: -$100.5b

Canadian Economic Data

08:30 AM

Capacity Utilization Rate, 3Q  Survey: 82.10%  Prior: 83.30%

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