Comments

Market Update

Tsys  weakening before CPI , lows of  overnight range, yields 1.2-2bps higher, 10Y 2.42 (+2bps).  Brief bid on democrat win in Alabama senate race evaporated the rest of the session. CPI coming up and FOMC meeting later this aft with the Fed expected to hike rates , but focus on new dotplots and final Yellen press conference. Core Euro bonds lower, led by 10Y bunds, spking lower with gilts ~5:30 after mixed UK labor data – rise in AWE yet  weaker employment, which could lead to higher gilt issuance on lower tax receipts. GOCs weaker in line with tsys, 10Y 1.895%. CMB 5 yr pricing this morning in the area of 32bps- mkt  has improved 31.5/31 (32/31.5 yest). 10Y  provi supply possible from Ont and Newf.

News headlines 

Fed 2018 Dots in Focus for Yellen Swan Song: Decision Day Guide (Bloomberg) As investors await 2018 direction from Federal Reserve chairman nominee Jerome Powell, they will get one last chance to hear Janet Yellen’s take on the U.S. economy.

Democrat Doug Jones Defeats GOP’s Roy Moore in Alabama Senate Race (Bloomberg) Democrat Doug Jones delivered a stunning upset defeat to Republican Roy Moore in a U.S. Senate race in deep-red Alabama that had split the GOP even before its controversial nominee was accused of inappropriate conduct with teenage girls.

U.K. Loses Most Jobs Since 2015 as Labor Market Shows Strain (Bloomberg) Britain shed jobs at the fastest pace in almost 2 1/2 years between August and October in a sign that the labor market is slowing.

Stocks Struggle Ahead of Fed Meeting; Bonds Fall: Markets Wrap (Bloomberg) Stocks in Europe struggled to match Asian gains as investors awaited policy decisions by central banks on the continent and in America. Most European bonds followed Treasuries lower as the dollar retreated.

Investor Bet on Middle East Oil Play Pays Off in Abu Dhabi IPO (Bloomberg) Investors who bet on exposure to Middle East oil got it right, at least on the first trading day of shares in a unit of Abu Dhabi’s oil giant.

Canada’s CIBC plans U.S. listing of $2 billion Caribbean unit  (Reuters) Canadian Imperial Bank of Commerce CM.TO plans to list its $2 billion Caribbean unit, FirstCaribbean, in New York, enabling it to exit a region where earnings growth has been slow, three people familiar with the matter told Reuters this week.

West Face files claim against mortgage lender Home Capital (Financial Post) Alternative asset manager West Face Capital Inc. has formally filed a lawsuit against Home Capital Group Inc. and three former executives, seeking $70 million in damages over claims the mortgage lender’s public disclosure was “inaccurate, incomplete and misleading.”

Overnight markets

Overview: US 10yr note futures are down -0.176% at 123-29, S&P 500 futures are down 0% at 2667.75, Crude oil futures are up 0.93% at $57.67, Gold futures are up 0.15% at $1243.6, DXY is down -0.07% at 94.039, CAD/USD is down -0.05% at 0.7777.

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 trading slightly weaker, yields ~0.5-1bp higher US 10Y 2.38%, light volume in TY futures (~250k).  Thirty year auction in the US, FOMC decision tommorow aft.  Core Euro govts lower on stronger UK inflation data after CPI rose to the highest level in five and a half years in Nov.  GOCs  weaker after stronger US PPI, spds 1-2bps wider vs tsys.  Provis unch, Ont 48s 69.5/69, Ont 27s 60/5, longs continue to outperform on extension flows.

News headlines 

Carney to Put Pen to Paper as U.K. Inflation Climbs Above 3% (Bloomberg) U.K. inflation unexpectedly accelerated to the fastest in more than 5 1/2 years in November, which will force Bank of England Governor Mark Carney to explain why price growth is so far above his policy target.

Crack in U.K. Oil Pipe Roils Crude Trading From U.S. to Asia (Bloomberg) The effects of a hairline crack in one of the world’s most important oil conduits is rippling through crude markets from Europe to the U.S. and Asia.

Moore, Jones Expose Rural-Urban Divide That Defines Alabama Race (Bloomberg) Democrat Doug Jones and Republican Roy Moore made their election eve pitches to Alabama voters in settings that evoked the cultural and political divide that’s come to define the two parties in modern America.

Atos Bids $5.1 Billion for Gemalto to Create French Tech Giant (Bloomberg) Atos SE made a 4.3-billion-euro ($5.06 billion) unsolicited bid for Gemalto NV with the backing of the French state’s investment bank, seeking to create a European leader in cybersecurity, digital technologies and payment services.

Stocks Push Higher as Oil Rises; Dollar Slips: Markets Wrap (Bloomberg) Stocks in Europe gained, while the dollar slipped and Treasuries steadied as the week’s central-bank meetings remained the focus for market participants.

Bond Traders Look to 2018 as This Week’s Fed Raise Seen as Done Deal (Bloomberg) With a Federal Reserve rate hike this week seen as a done deal, the best chance for bond-market volatility may lie in policy makers’ updated outlook for the pace of future tightening.

Canada beefing up housing data as policy pushes ahead (Reuters) Fresh data on foreign investment in Toronto and Vancouver, Canada’s largest cities, will be released next week in a move economists hope will shed light on what is driving demand – and a potential bubble – in the country’s housing market.

Canada, provinces end dispute on how to split pot tax revenues (Reuters) The Canadian government and the country’s 10 provinces on Monday settled a disagreement on how to split the revenues from a proposed federal tax on marijuana sales once the narcotic drug is legalized next July, Finance Minister Bill Morneau said.

Overnight markets

Overview: US 10yr note futures are down -0.038% at 124-07, S&P 500 futures are up 0.08% at 2666.75, Crude oil futures are up 0.9% at $58.51, Gold futures are down -0.14% at $1245.1, DXY is up 0.01% at 93.872, CAD/USD is down -0.19% at 0.7793.

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 slight bid in wake of  NY subway explosion, TY futures making new highs ~7:45am , equities briefly fell into the red now are positive with S&P futures +1.00, 10Y tsy  2.355% (-2bps). Tsys bid in Asia & Europe led by long end, strong rally in UK gilts (10Y ~6bps) after Brexit Secretary comments that Brexit deal reached Friday regarding Irish border issue was not legally binding. Latest CFTC COT report  showed dealer Eurodollar longs at all-time highs, ~$167bln in 10Y equivalents, while specs are close to record short ten year futures. In Canada, GOCs  slightly wider vs tsys in the tsy rally, 10Y 1.84% (-1.2bps), curve 0.5bps flatter. In wake of BOC cautious statement last week, Can/US spreads 4-6bps tighter led by the 10Y. Provincials ended the week ~1.5bps tigther, yields out the curve at new lows with credit curves flatter as well . Honda Canada FInance in the mkt with $300mln  5Y fixed at ~83bps  and $300mln  3Y FRN @ ~ CDOR +30 –   15-17 over bank FRN, and cheap vs Aug 2020 FRN, which we see closer to CDOR +22 – so basically we would skip the 5Y and put in for 3Y FRN..

News headlines 

Explosion Reported Near Port Authority in New York City (NBC) Officials are responding to an explosion in Midtown Manhattan in the Port Authority area Monday morning, New York City officials confirmed to NBC News. The explosion took place near 42nd Street and 8th Avenue, according to the officials. Multiple ambulances have been requested.

U.S. Growth Pickup to Spur Earlier Fed Hike in ‘18, Survey Shows (Bloomberg) A strengthening U.S. economy may spur the Federal Reserve to raise interest rates twice in the next 3 1/2 months as a tight labor market pushes risks to the upside, a Bloomberg survey showed.

Investors Told to Brace for Steepest Rate Hikes Since 2006 (Bloomberg) Wall Street economists are telling investors to brace for the biggest tightening of monetary policy in more than a decade. With the world economy heading into its strongest period since 2011, Citigroup Inc. and JPMorgan Chase & Co. predict average interest rates across advanced economies will climb to at least 1 percent next year in what would be the largest increase since 2006.

Inside May’s Race to a Late-Night Brexit Deal (Bloomberg) It was 11 p.m. Thursday night and the staff Christmas party at 10 Downing St. was in full swing, with karaoke blasting and wine washing down the samosas and sausage rolls. Downstairs, Prime Minister Theresa May shut herself in her private office with her closest aides. It was time to talk to Arlene Foster again.

U.S. Stock Futures Erase Gain, Gold Advances: Markets Wrap (Bloomberg) U.S. stock futures erased gains on reports of an explosion in midtown Manhattan. The dollar fell and Treasuries rose. Contracts on the S&P 500 Index wiped out a small advance after the New York Police Department tweeted that it was responding to reports of an explosion at the Port Authority bus terminal on 42nd St. The dollar extended a loss and gold advanced.

U.A.E., Kuwait Target June for Talks on Phasing Out Oil Cuts (Bloomberg) OPEC and allied oil producers can draft a strategy in June to end global output cuts if the market is no longer oversupplied by then, the U.A.E.’s energy minister said. Kuwait said the cuts may end before 2019 if the market is re-balanced by June.

Canada third-quarter industrial capacity rises for fifth consecutive quarter (Reuters) Canada’s industrial capacity rose in the third quarter for a fifth straight quarter as gains in the construction sector offset lower extraction volumes in the oil and gas industry, data from Statistics Canada showed on Friday.

Futures little changed as oil prices edge lower (Reuters) Futures for Canada’s main stock index were little changed on Monday amid a fall in oil prices on signs of an increase in U.S. drilling activity.

Overnight markets

Overview: US 10yr note futures are up 0.126% at 124-14, S&P 500 futures are up 0.05% at 2655.25, Crude oil futures are up 0.26% at $57.51, Gold futures are up 0.17% at $1250.5, DXY is down -0.07% at 93.836, CAD/USD is up 0.09% at 0.7775. 

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