Commentaires
15/12/2017
Market Update
Tsys slightly lower on very light flows o/n (211k TY), 10Y 2.355%. Tsys lagging the rally in EGBs, led again by UK gilts with the gilt curve another 2bps flatter, UK 5/30 near the lows since Aug 2016, 10Y @ 1.15 the lowest since Sep 13th. Progress on Brexit negotiations. In Canada, GOCs 0.5bps wider vs tsys, curve another 1bp flatter on top of the 3bps in the wake of Poloz somewhat hawkish comments yest afternoon, specifically that ‘caution isn’t code for being on hold’, thou the curve did resteepen late in the day after Poloz added that he would allow the economy to ‘run hotter’ for a bit. In credit, Smart Reit (BBB) priced a two tranche deal yest to finance its $1.1bln acquisition of OneReit – $250mln 3Y FRN @ CDOR + 66, $250mln 10Y @ 197, both tranches broke tighter.
News headlines
Here’s Where the GOP Tax Plan Stands Right Now (Bloomberg) Congressional Republicans are scheduled to reveal final details of their agreed-upon tax-overhaul legislation Friday. It’s the culmination of a six-week legislative sprint designed to deliver a major policy victory for their party and President Donald Trump before year’s end.
The Biggest Voices in Oil Disagree About 2018 (Bloomberg) The two most critical forecasts of global oil markets offer contrasting visions for 2018: one in which OPEC finally succeeds in clearing a supply glut, and another where that goal remains elusive.
Brexit Bulletin: Divide But Not Conquer (Bloomberg) The European Union’s united front on Brexit is set to splinter as negotiations move on to trade. That’s not necessarily a good thing for Britain. The EU’s 27 remaining countries surprised themselves by defying years of talking at cross purposes to hold a common line on the U.K.’s withdrawal. But with leaders in Brussels set to formally agree on Friday that May has offered enough on the divorce settlement for talks to move on, there are already signs the unity has hit its high-water mark. Diplomats, and leaders, have warned the next stage could be messier.
European Stocks Drop as Bonds Gain; Dollar Steady: Markets Wrap (Bloomberg) Stocks in Europe dropped and bonds gained as investors assessed messages from the Federal Reserve and European Central Bank meetings this week, while concerns about the U.S. tax overhaul lingered.
Russia Surprises With Bigger Rate Cut on Oil Deal, Inflation (Bloomberg) Russia’s central bank unexpectedly accelerated its pace of monetary easing after price growth fell to a record and a deal between OPEC and its allies to maintain oil production cuts until the end of 2018.
Some Canada firms could move to U.S. amid NAFTA worries: survey (Reuters) More a quarter of Canadian firms could move part of their operations to the United States amid uncertainty over the future of the NAFTA trade pact, the nation’s export credit agency said on Friday.
TSX futures point to flat opening (Reuters) December futures on the S&P TSX index SXFc1 were down 0.04 percent at 7:15 a.m. ET. Manufacturing sales data is due at 8:30 a.m. ET ECONCA.
Overnight markets
Overview: US 10yr note futures are down -0.1% at 124-14, S&P 500 futures are up 0.35% at 2665.25, Crude oil futures are up 0.23% at $57.17, Gold futures are up 0.43% at $1262.5, DXY is up 0.07% at 93.551, CAD/USD is down -0.28% at 0.7836.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.565% | 2 Year | 1.824% |
| 5 Year | 1.701% | 5 Year | 2.149% |
| 10 Year | 1.861% | 10 Year | 2.357% |
| 30 Year | 2.15% | 30 Year | 2.704% |
US Economic Data
| 8:30 AM | Empire Manufacturing, Dec 18.0 est 18.7 (19.4 prior) |
| 9:15 AM | Industrial Production MoM, Nov est 0.3% (0.9% prior) |
| Capacity Utilization, Nov est 77.2 (77.0 prior) | |
| Manufacturing (SIC) Production, Nov est 0.3% (1.3% prior) | |
| 16:00 PM | Total Net TIC Flows, Oct (-51.3b prior) |
| Net Long-term TIC Flows, Oct (80.9b prior) |
Canadian Economic Data
| 8:30 AM | Manufacturing Sales MoM, Oct -0.4% est 1.0% (0.5% 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
14/12/2017
Market Update
Tsys weaker, yields 2-3bps higher, 10Y 2.37% (+2.8bps) – , yield curve slightly flatter, little reaction to stronger Nov retail sales (0.8% vs 0.3%). In Europe UK gilts outperforming, gilt/bund spread at a three-month low 87 bps – the March gilt future spiked to intra day high 125.18 well after BOE decision to leave rates unch despite a very strong read on Nov UK retail sales 1.1% vs 0.4%. Bunds under pressure as flash PMI data from France and Germany came in better than exp. GOCs better offered after 8:30 US data, Can/US 1bp tighter after yesterday’s 4bp post FOMC widening.
News headlines
Fed Raises Rates, Eyes Three 2018 Hikes as Yellen Era Nears End (Bloomberg) Federal Reserve officials followed through on an expected interest-rate increase and raised their forecast for economic growth in 2018, even as they stuck with a projection for three hikes in the coming year.
Carney in Holding Pattern on Interest Rates After November Hike (Bloomberg) The Bank of England will fall into a central banking holding pattern on Thursday after November saw the first interest-rate hike in a decade.
Two GOP Senators Slam Tax Cuts for Rich, But How Will They Vote? (Bloomberg) President Donald Trump insisted Wednesday that his tax cut is all about helping the middle class even as Republican leaders formed a last-minute plan to cut the top rate paid by million-dollar earners.
Euro-Area Activity Surges as Manufacturing Posts Record Growth (Bloomberg) Economic momentum in the euro area unexpectedly accelerated to the fastest pace in almost seven years as manufacturing posted record growth at the end of 2017. A composite Purchasing Managers’ Index rose to 58 in December from 57.5 in November, IHS Markit said. Economists surveyed by Bloomberg predicted a decline to 57.2. An index for Germany, the region’s biggest economy, jumped to the highest since 2011.
European Stocks Down, Euro Steady After ECB Holds: Markets Wrap (Bloomberg) Stocks stayed lower, while the euro and core European bonds held steady after the European Central Bank left its key rate unchanged and maintained its pledge to move slowly in winding down euro-area stimulus.
U.K. Retailers Get Black Friday Boost as Sales Jump 1.1% (Bloomberg) Black Friday gave U.K. retailers a stronger-than-expected boost last month as discounts spurred Britons to snap up electrical appliances and other household products.
Walt Disney buys Murdoch’s Fox for $52.4bn (BBC) Walt Disney says it is to buy 21st Century Fox’s entertainment assets for a total $52.4bn (£39bn). The deal includes Fox’s 39% stake in satellite broadcaster Sky, and the 20th Century Fox film studio, Disney announced. Fox’s remaining assets, including Fox News and Sports, will form a new company.
Canadian home prices fall again in November: Teranet (Reuters) Canadian home prices fell again in November, the third straight monthly decline and the largest November drop outside of a recession, as Toronto prices fell for the fourth month and Vancouver prices were flat, data showed on Wednesday
Bombardier forecasts 2018 revenue below analysts’ estimates (Reuters) Canadian plane and train maker Bombardier Inc, in the middle of a five-year plan to turn around its ailing business, on Thursday forecast 2018 revenue that came in well short of analysts’ estimates.
Overnight markets
Overview: US 10yr note futures are down -0.113% at 124-15, S&P 500 futures are up 0.07% at 2671, Crude oil futures are down -0.44% at $56.35, Gold futures are up 0.89% at $1259.7, DXY is down -0.08% at 93.355, CAD/USD is up 0.1% at 0.7795.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.52% | 2 Year | 1.803% |
| 5 Year | 1.672% | 5 Year | 2.133% |
| 10 Year | 1.859% | 10 Year | 2.364% |
| 30 Year | 2.171% | 30 Year | 2.738% |
US Economic Data
| 8:30 AM | Initial Jobless Claims, Dec 9th est 236k (236k prior) |
| Continuing Claims, Dec 2nd est 1900k (1908k prior) | |
| Retail Sales Advance MoM, Nov est 0.3% (0.2% prior) | |
| Retail Sales Ex Auto MoM, Nov est 0.6% (0.1% prior) | |
| Retail Sales Ex Auto and Gas, Nov est 0.4% (0.3% prior) | |
| Import Price Index MoM, est 0.7% (0.2% prior) | |
| Import Price Index Ex Petroleum, Nov est 0.1% (0.1% prior) | |
| Import Price Index YoY, Nov est 3.2% (2.5% prior) | |
| Export Price Index MoM, Nov est 0.3% (0.0% prior) | |
| 9:45 AM | Markit US Manufacturing PMI, Dec est 53.9 (53.9 prior) |
| Markit US Services PMI, Dec est 54.7 (54.5 prior) | |
| Markit US Composite PMI, Dec (54.5 prior) | |
| Bloomberg Consumer Comfort, Dec 10th (52.3 prior) | |
| 10:00 AM | Business Inventories, Oct est -0.1% (0.0% prior) |
Canadian Economic Data
| 8:30 AM | New Housing Price Index MoM, Oct est 0.2% (0.2% prior) |
| New Housing Price Index YoY, Oct (3.8% prior) | |
| 9:00 AM | Existing Home Sales MoM, Nov (0.9% prior) |
| Bloomberg Dec. Canada Economic Survey |
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
13/12/2017
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.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.54% | 2 Year | 1.848% |
| 5 Year | 1.704% | 5 Year | 2.197% |
| 10 Year | 1.893% | 10 Year | 2.425% |
| 30 Year | 2.187% | 30 Year | 2.796% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Dec 8th -2.3% (4.7% prior) |
| 8:30 AM | CPI MoM, Nov est 0.4% (0.1% prior) |
| CPI Ex Food and Energy MoM, Nov est 0.2% (0.2% prior) | |
| CPI YoY, Nov est 2.2% (2.0% prior) | |
| CPI Ex Food and Energy YoY, est 1.8% (1.8% prior) | |
| CPI Core Index SA, Nov est 253.932 (253.428 prior) | |
| CPI Index NSA, Nov est 246.816 (246.663 prior) | |
| Real Avg Weekly Earnings YoY, Nov (0.4% prior) | |
| Real Avg Hourly Earnings YoY, Nov (0.4% prior) | |
| 14 :00 PM | FOMC Rate Decision (Upper Bound), Dec 13th est 1.50% (1.25% prior) |
| FOMC Rate Decision (Lower Bound), Dec 13th est 1.25% (1.00% prior) |
Canadian Economic Data
| 8:30 AM | Teranet/National Bank HPI MoM, Nov (-1.0% prior) |
| Teranet/National Bank HPI YoY, Nov (10.0% prior) | |
| Teranet/National Bank HP Index, Nov (218.13 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