Commentaires

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. 

US Economic Data

Canadian Economic Data

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

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. 

 US Economic Data

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

Market Update

Tsys weaker, yields 1.2-2bps higher with the 10Y 2.373% (+2bps), avg volume in TY futures (205k). Equities stronger with S&P futures +10, crude higher for third day , +0.46% 57.55.  Optimism on passage of US tax cut with Senate to vote as early as tomorrow. Tsys weaker into European trading, lagging the rally in EGBs with bund/gilt yields 1-2 lower. GOCs lower, in line with tsys, curve slightly flatter – Friday’s late day rally in longs left the GOC 5s30s the flattest in ten years. A large 0.08yr extension in the FTSE TMX index supporting the long end, yet over the past month there has also been a significant increase in the correlation between movement in the  GOC curve and the tsy curve. Provi spreads starting firm, Ont 27s trading down at 58bps , a new low , 2bps tighter since last Monday. 

News headlines 

Everything You Need to Know About the GOP Tax Bill (Bloomberg)  Here are key changes to U.S. tax law for individuals and businesses that have emerged from the final Republican bill that’s headed for votes in the House and Senate next week.

May Risks Brexit Row Over Migration and Trade During Transition (Bloomberg) U.K. Prime Minister Theresa May will set out her plan for how a proposed Brexit transition period will work, stoking a potential new row with the European Union as she tries to keep different factions inside the Conservative Party on her side.

Stocks Hit Records With GOP Set to Unveil Tax Bill: Markets Wrap (Bloomberg) U.S. stocks rallied to new highs and the dollar strengthened as investors grew increasingly optimistic that Congress would reach a deal to cut corporate taxes.

Modi Set to Retain Grip on Home State After Bellwether Vote (Bloomberg) Indian Prime Minister Narendra Modi’s party is set to return to power in his home state, an election that’s considered a bellwether before the national vote in early 2019.

Bombardier’s Chinese Joint Venture Wins its First Monorail Contract in China (MarketWired) Rail technology leader Bombardier Transportation announced today that the CRRC Puzhen Bombardier Transportation Systems Limited (PBTS), a joint venture (JV) between Bombardier Transportation and the Chinese CRRC Corporation Limited (CRRC), has been awarded its first monorail contract in China. The order is to provide the BOMBARDIER INNOVIA Monorail 300 platform, along with a total of 240 cars to Wuhu City in Anhui Province. The total contract is valued at approximately 1.785 billion CNY (229 million euro, $270 million US). Bombardier owns 50% of the shares in PBTS, which is consolidated by Bombardier Transportation’s partner CRRC Nanjing Puzhen Limited.

Duelling bitcoin futures go head-to-head as CME launches contract (Financial Times) The bitcoin futures race began in earnest on Sunday as exchange operator CME Group challenged another Chicago exchange that had launched the first digital currency futures a week before.

Campbell Soup to buy snacks maker Snyder’s-Lance for $4.87 billion (Reuters) Campbell Soup Co CPB.N will buy Pretzels and Cape Cod chips maker Snyder‘s-Lance Inc LNCE.O for $4.87 billion as it looks to expand its snack business amid sagging soup sales.

Overnight markets

Overview: US 10yr note futures are down -0.126% at 124-09, S&P 500 futures are up 0.37% at 2692, Crude oil futures are up 0.56% at $57.62, Gold futures are up 0.37% at $1262.2, DXY is down -0.29% at 93.662, CAD/USD is up 0.05% at 0.7768. 

US Economic Data

Canadian Economic Data

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