Comments
21/12/2017
Market Update
Tsys trading higher before 8:30 data (Phil Fed, GDP), 10Y 2.48% (-1.6bps) after three day selloff. Current levels on TY near highs of overnite range on moderate volume (288k). Equities firmer (S&P fut +5.25), crude slightly weaker. Core EGBs lower, gilts trading lower led by 5-10Y sector, EU peripheral spreads at recent tights vs Germany before Catalan regional vote today. In Canada, GOCs lower & 1-2 bps wider vs tsys before CPI & retail sales. Provis opening unch after closing yest another 0.5bps tighter, Ont 48/27 curve trading below 10bps as longs outperform and despite continued narrowing in GOC 10s30s recently to ~25bps
News headlines
House Republican Leaders Push Bare-Bones Temporary Funding (Bloomberg) The House is set to vote on a bare-bones stopgap funding plan that would avert a government shutdown on Saturday and likely force the Senate to abandon attempts to add other provisions.
Ryan Pushes Trump to Follow Tax Win With U.S. Welfare Revamp (Bloomberg) Republicans want to channel momentum from the GOP’s victory on taxes into a push to overhaul the nation’s welfare programs, though some of President Donald Trump’s advisers prefer a less controversial infrastructure plan at the top of his agenda.
May’s Top Cabinet Ally Damian Green Quits After Porn Claims (Bloomberg) U.K. Prime Minister Theresa May’s effective deputy, Damian Green, resigned after an official investigation found that he’d made misleading statements about pornography on one of his parliamentary office computers, and left questions unanswered about his behavior toward a female activist.
Bonds Tumble, Equities Mixed as Tax Bill Passes: Markets Wrap (Bloomberg) U.S. stocks fluctuated while Treasury yields climbed to a nine-month peak as the Republican tax overhaul passed its final vote before going to President Donald Trump for his signature.
What Catalonia’s Vote Can, and Can’t, Accomplish (Bloomberg) An election in Catalonia Dec. 21 gives voters another chance to express their view on whether the region should press ahead with its fight to break away or remain within Spain. The vote was called in October, when Spanish Prime Minister Mariano Rajoy fired the Catalan government and dissolved the regional parliament in a bid to snuff out the secession movement. With ousted Regional President Carles Puigdemont in self-imposed exile in Brussels, the ballot may do little to settle the bitter division over Catalonia’s bid for independence — and Rajoy’s efforts to stop it.
Domestic wholesale trade data, oil lift Canadian dollar (Reuters) The Canadian dollar strengthened against its U.S. counterpart on Wednesday after domestic data showed wholesale trade rose more than expected in October, which could bode well for economic growth at the start of the fourth quarter.
Trump administration sides with Boeing in Bombardier dispute (Reuters) The Trump administration on Wednesday recommended steep anti-subsidy duties on Bombardier Inc’s CSeries jets, setting up the next round of a fierce international trade dispute between the United States and Canada.
Overnight markets
Overview: US 10yr note futures are up 0.076% at 123-18, S&P 500 futures are up 0.2% at 2686.75, Crude oil futures are down -0.55% at $57.77, Gold futures are down -0.13% at $1268, DXY is up 0.14% at 93.443, CAD/USD is down -0.27% at 0.7812.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.639% | 2 Year | 1.853% |
| 5 Year | 1.822% | 5 Year | 2.232% |
| 10 Year | 2.002% | 10 Year | 2.486% |
| 30 Year | 2.253% | 30 Year | 2.866% |
US Economic Data
| 8:30 AM | Philadelphia Fed Business Outlook, Dec est 21.0 (22.7 prior) |
| GDP Annualized QoQ, 3Q est 3.3% (3.3% prior) | |
| Personal Consumption, 3Q est 2.3% (2.3% prior) | |
| GDP Price Index, 3Q est 2.1% (2.1% prior) | |
| Core PCE QoQ, 3Q est 1.4% (1.4% prior) | |
| Initial Jobless Claims, Dec 16th est 233k (225k prior) | |
| Continuing Claims, Dec 9th est 1898k (1886k prior) | |
| Chicago Fed Nat Activity Index, Nov est 0.50 (0.65 prior) | |
| 9:00 AM | FHFA House Price Index MoM, Oct est 0.4% (0.3% prior) |
| 9:45 AM | Bloomberg Consumer Comfort, Dec 17th (51.3 prior) |
| Bloomberg Economic Expectations, Dec (53.0 prior) | |
| 10:00 AM | Leading Index, Nov est 0.4% (1.2% prior) |
Canadian Economic Data
| 8:30 AM | CPI NSA MoM, Nov est 0.2% (0.1% prior) |
| CPI YoY, Nov est 2.0% (1.4% prior) | |
| Consumer Price Index, Nov est 131.1 (130.9 prior) | |
| CPI Core – Common YoY%, Nov est 1.7% (1.6% prior) | |
| CPI Core – Trim YoY%, Nov (1.5% prior) | |
| CPI Core- Median YoY% (1.7% prior) | |
| Retail Sales MoM, Oct est 0.3% (0.1% prior) | |
| Retail Sales Ex Auto MoM, Oct est 0.4% (0.3% 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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
20/12/2017
Market Update
Tsys selloff continues on heavy volume, 10Y approaching 2.50% , eclipsing the intra day high from October 27th on US tax cut overhaul, with the Senate slated to vote on the bill later this morning. Core European bonds in catchup mode, 10Y bund 0.403% 9+3bps), gilts +5bps 1.25%. GOCs lower, underperforming tsys 2-3bps with the 10Y closing in on 2.0%. Provis trading up 0.5bp with all in yields 2-3bps higher, Ont 27s @57.5, Ont 48s @ 68.
News headlines
Senate Passes U.S. Tax Overhaul Putting Trump on Brink of Big Win (Bloomberg) Senate Republicans passed the most extensive rewrite of the U.S. tax code in more than 30 years, a bill that delivers a deep, permanent tax cut for corporations and shorter-term relief for individuals.
Congress Dives Into Shutdown Drama Hours After GOP Win on Taxes (Bloomberg) Congressional leaders are trying to to jam as many extras as possible into a must-pass spending bill that may end up ricocheting between the House and Senate right up to the deadline three days from now.
Uber Loses Bid to Lock Taxi Drivers Out of London License Appeal (Bloomberg) Uber Technologies Inc. lost a bid to prevent two unions representing taxi drivers from taking part in the appeal of Transport for London’s decision to ban the company from operating in the city.
Catalan Vote Lures Value Hunters Eyeing Spanish Stock Bounce (Bloomberg) For bargain hunters, it’s the catalyst that’s drawing them to Spanish shares. The IBEX 35 Index, having lost 8 percent since a May peak, is trading near its cheapest relative to the Euro Stoxx 50 Index in more than seven years. With elections in Catalonia on Thursday seen unlikely to give a clear majority to the separatist bloc demanding the region’s secession, bulls say it’s time to buy.
Europe Stocks Drop as Tax Vote Spurs S&P Futures: Markets Wrap (Bloomberg) Stocks in Europe retreated on Wednesday after a mixed session in Asia, even as S&P 500 futures advanced as U.S. lawmakers moved closer to a tax overhaul. The dollar was little changed and Treasuries were steady, but core European bonds resumed a selloff.
Oil Prices in 2018: Once Again It’s All About U.S. Shale Output (Bloomberg) Crude oil production out of the U.S. is expected to hit record levels next year, buoyed in part by OPEC supply curbs that have put a floor under prices. For analysts forecasting prices next year, there are two key questions: exactly how far American production grows and whether the global economy is strong enough to swallow those extra barrels?
Canada home prices to cool in 2018 as rates rise, mortgage rules hit (Reuters) Canadian home prices are expected to cool significantly next year as tighter mortgage rules come into effect and as further expected interest rate hikes are likely to dampen a market that has been stoked by cheap borrowing, a Reuters poll found.
Overnight markets
Overview: US 10yr note futures are down -0.038% at 123-21, S&P 500 futures are up 0.33% at 2692.75, Crude oil futures are up 0.38% at $57.78, Gold futures are up 0.4% at $1269.2, DXY is down -0.01% at 93.435, CAD/USD is down -0.23% at 0.7782.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.612% | 2 Year | 1.853% |
| 5 Year | 1.775% | 5 Year | 2.22% |
| 10 Year | 1.959% | 10 Year | 2.47% |
| 30 Year | 2.223% | 30 Year | 2.84% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Dec 15th -4.9% (-2.3% prior) |
| 10:00 AM | Existing Home Sales, Nov est 5.53m (5.48m prior) |
| Existing Home Sales MoM, Nov est 0.9% (2.0%) |
Canadian Economic Data
| 8:30 AM | Wholesale Trade Sales MoM, Oct 1.5% est 0.5% (-1.2% 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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
19/12/2017
Market Update
Tsys weakening in NA trade, 10Y 2.41%, risk on as passage of US tax bill set for a vote in the House at 1:30pm. US Housing starts rose to the highest in a decade in Nov, +3.3% m/m vs -3.1% exp. German bunds, gilts weaker , yields 2-3bps higher, underperforming tsys. GOCs lower led by the 10Y which is ~5bps wider on the fly vs 2s30s, 10s30s below 26bps , flattest in 10 yrs. Provis open unch, Ont 49s 68.5, was reopened yest at 68 or -1 vs Ont 48s.
News headlines
Here’s Where the GOP Tax Plan Stands Right Now (Bloomberg) Congressional Republicans kicked off the final leg of their six-week legislative sprint to overhaul the U.S. tax code and deliver a major policy victory for President Donald Trump before year’s end. The House is scheduled to vote Tuesday on the tax bill and Senate leaders intend to bring the measure up as soon as they get it.
Michel Barnier Doubles Down on Brexit (Bloomberg) European Union Chief Negotiator Michel Barnier dug in and stressed a hardline trade position just as U.K. Prime Minister Theresa May’s key ministers were starting to unite behind a Brexit policy that may soothe rifts in her Cabinet.
South African Stocks Rally as Ramaphosa Seen as Watershed (Bloomberg) South Africa’s benchmark stocks index had their biggest rally since March following the ascent of the business and investor-friendly Cyril Ramaphosa to leader of the ruling African National Congress, removing an overhang that had weighed on market sentiment.
Stocks Mixed as Euro Climbs; Core Bonds Decline: Markets Wrap (Bloomberg) European stocks struggled to build on Monday’s gains as the common currency advanced, while U.S. equity futures edged higher as the prospects for tax cuts in the world’s largest economy continued to buoy sentiment.
Short Seller Says Naive Bitcoin Traders Open a Pathway to Profit (Bloomberg) As newly launched derivatives contracts draw pros into the bitcoin market, a short seller still sees a massive inefficiency — and a chance to profit off naïve traders.
Canada oil producers exhaust options as pipelines, railroads fill (Reuters) Canadian oil producers are running out of options to get crude to market as pipeline and rail capacity fills up, driving prices to four-year lows and increasing the risk of firms having to sell cheaply until at least late 2019.
Boeing-Bombardier spat puts U.S.-Canadian trade deals in spotlight (Reuters) Boeing Co and Bombardier Inc traded barbs on Monday over the U.S. planemaker’s claim that its Canadian rival benefited from billions of dollars in illegal government subsidies and dumped its newest jetliner in the United States at below cost.
Overnight markets
Overview: US 10yr note futures are down -0.151% at 124-02, S&P 500 futures are up 0.1% at 2697.25, Crude oil futures are up 0.63% at $57.52, Gold futures are down -0.06% at $1264.7, DXY is down -0.15% at 93.552, CAD/USD is up 0.01% at 0.7774.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.587% | 2 Year | 1.844% |
| 5 Year | 1.733% | 5 Year | 2.188% |
| 10 Year | 1.906% | 10 Year | 2.414% |
| 30 Year | 2.165% | 30 Year | 2.767% |
US Economic Data
| 8:30 AM | Housing Starts, Nov 1297k est 1250k (1290k prior) |
| Housing Starts MoM, Nov 3.3% est -3.2% (13.7% prior) | |
| Building Permits, Nov 1298k est 1270k (1297k prior) | |
| Building Permits MoM, Nov -1.4% est -3.5% (5.9% prior) | |
| Current Account Balance, 3Q -100.6b est -116.2b (-123.1b prior) |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230