Commentaires

Market Update

US Treasuries opened NY higher, flatter after US Senate Thursday night postponed GOP tax bill vote to 11am ET Fri, amid need for compromise as various GOP sides want different bill contents.Bloomberg reports various GOP factions appeared to have made « a lot of progress » overnight in addressing « deficit concerns, » but more work to be done, citing a Senate aide. Canada November Employment +79.5k, above +10k expected and largest gain since Apr’12. Unemployment rate 5.9%, lowest since Feb’08 vs 6.2% expected. Full-time +29.6k. Part-time +49.9k. Particiption rate unch at 65.7%. Hourly wages of permanent workers +2.7% y/y,largest gain since Apr’16. 3Q real GDP +1.7% ann., as expected. 2Q rev to +4.3% from +4.5%. 3Q slowdown mainly on weak exports and residential investment (weaker housing resale mkt). Largst positive contribution was household consumption while exports trimmed GDP by 3.4pts. invent build up added 1.1 pt.

News headlines 

Senate Suspends Bill Votes to Friday Morning: Tax Debate Update (Bloomberg) The Senate tax bill is headed for a marathon debate this week after Republican leaders brought the measure to the floor Wednesday with the goal of holding a final vote by the end of the week. Here are the latest developments, updated throughout the day

May’s Brexit Breakthrough at Risk as Irish Parties Dig In (Bloomberg) The breakthrough in Brexit talks that Theresa May has been working to clinch next week was at risk Friday as the Northern Irish party that props up her government threatened to bring her down if she makes anything like the concessions that Europe is demanding.

Booming Euro-Area Factories Expand at Fastest Pace Since 2000 (Bloomberg) Euro-area factories haven’t done this well since the height of the dot-com boom 17 years ago. A Purchasing Managers’ Index for manufacturing rose to 60.1 in November from 58.5 the previous month, IHS Markit said on Friday. That beats a preliminary reading of 60 and is the second-highest reading since the survey began in June 1997.

Stocks Drop as Tech Selloff Resumes; Dollar Steady: Markets Wrap (Bloomberg) European stocks dropped at the start of the last month of 2017 as a selloff in technology shares resumed. The dollar edged lower and Treasuries gained after tax reform efforts in the U.S. stumbled.

Tillerson Faces ‘Death Blow’ After Repeated Clashes With Trump (Bloomberg) Time is quickly running out for U.S. Secretary of State Rex Tillerson. America’s top diplomat heads to Europe next week hobbled by reports that the White House is preparing to oust him. On stops in Brussels, Vienna and Paris, he’ll face foreign leaders who will do their best to express comity but also wonder how much longer he’ll remain in the job.

National Bank boosts dividend as quarterly profit jumps (Globe and Mail) National Bank of Canada raised its dividend as it reported stronger fourth-quarter profit driven by gains in personal and commercial banking as well as wealth management.

Canada stock futures little changed ahead of economic data (Reuters) The gross domestic product report, due at 8:30 a.m. ET, is expected to show growth of 1.6 percent on an annualized basis for the third quarter. The employment change data, also due at 8:30 a.m. ET, is likely to show an addition of 10,000 jobs in November, bringing the unemployment rate down to 6.2 percent.

Global manufacturing buoyed as focus shifts to rate hikes (Reuters) Global manufacturing expanded at the fastest pace in years last month and the second-best in two decades in the euro zone, driven by robust demand and bolstering the case for central banks to shift to tighter monetary policy.

Overnight markets

Overview: US 10yr note futures are up 0.239% at 124-11, S&P 500 futures are down -0.12% at 2644.75, Crude oil futures are up 0.82% at $57.87, Gold futures are up 0.07% at $1277.6, DXY is up 0.06% at 93.101, CAD/USD is down -0.12% at 0.7763. 

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 little changed after8:30 data, 10Y 2.383% after yesterday’s 6bp selloff, prices moving off the lows despite firmer Oct core PCE, lower claims. UK gilts lower for a second day, off the lows after . Month end extensions in view  with both the US & European Bloomberg-Barclays Indexes seeing greater than avg extensions for the year and compared to this time last yr  – the US @ 0.11 vs 0.06 avg.  GOCs unch vs tsys, long end better bid on the curve, 10s30s ~1.5bps narrower since yest. Provis trading up to start after closing 0.5bps tighter yest on no supply. Metro 3-part deal well subscribed, all tranches closing ~5bps tighter on the break.

News headlines 

OPEC and Russia Ready to Extend Oil-Supply Cuts Through 2018 (Bloomberg) OPEC and Russia are ready to extend their oil production cuts until the end of next year to ensure global stockpiles keep falling and prices maintain recent gains. All OPEC members and Russia, the biggest producer outside the group to join the deal, agree the cuts should last until the end of 2018, according to delegates in Vienna to attend Thursday’s meeting. On Wednesday, a committee charged with overseeing the agreement on behalf of the whole group also recommended extending until the end of next year, two delegates said.

Euro-Area Inflation Misses Estimates as Unemployment Falls (Bloomberg) The European Central Bank got a reminder that the improving economy doesn’t guarantee a return of inflation to its goal, as unemployment unexpectedly dropped but consumer-price growth missed estimates.

Goldman Warns That Market Valuations Are at Their Highest Since 1900 (Bloomberg) A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs Group Inc.

Euro Flat, Bonds Up on Inflation Miss; Stocks Rise: Markets Wrap (Bloomberg) The euro fluctuated and most European bonds rose as consumer-price growth in the region missed estimates in November. Stocks shrugged off a weak session in Asia to advance as investors switched from some of this year’s best-performing sectors into more defensive names.

Here’s Where the GOP Tax Plan Stands Right Now (Bloomberg)  The Senate tax bill is headed for a marathon debate this week after Republican leaders brought the measure to the floor Wednesday with the goal of holding a final vote by the end of the week.

Canadians doing business in China should be warned of possible trouble, former envoy says (Globe and Mail) A former Canadian ambassador to China says Ottawa should issue a prominent and official warning to Canadian business people that commercial disputes in China could result in their being detained and having their passports seized.

Enbridge to raise dividend by 10% amid share issue, asset sales (Globe and Mail) Enbridge Inc. is issuing $1.5-billion of shares and plans to sell at least $3-billion in assets as it seeks to fund major development projects and streamline its operations following its takeover of Spectra Energy.

Canada’s CIBC reports earnings ahead of market expectations (Reuters) Canadian Imperial Bank of Commerce (CM.TO) reported fourth-quarter earnings which were in line with market expectations, helped by strong growth in its Canadian commercial banking and wealth management business.

Overnight markets

Overview: US 10yr note futures are down -0.176% at 124-08, S&P 500 futures are up 0.32% at 2633.5, Crude oil futures are up 0.72% at $57.71, Gold futures are down -0.51% at $1279.7, DXY is up 0.1% at 93.258, CAD/USD is up 0.12% at 0.7764. 

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 weaker, unwinding brief FTQ bid following N. Korea missile launch, trading lower since Europe with core EGBs, US 10Y 2.37% (+4.3bps), little reaction to upwardly revised Q3 GDP (3.3% vs 3.0% prev). Gilts yields 10bps higher, bunds weaker on stronger Grman CPI.  GOCs lower, continuing outpeformance vs tsys, another 1.5bps tighter in the 10Y at -52bps. At noon the BOC auctions $700mln in 2050 RRBs. Real yields at 0.60% are ~18bps lower since  the last auction on Sept 13th, while breakevens have been trading in a narrow 5bp range since July. The 2050/47 real yield spd has narrowed to 0.8bps, the low end of the range since the 2050 RRB was first auction in May. Provis a touch softer yest in wake of new Ont 49 issue @ 70.5, now 71/70.

News headlines 

Revenue Trigger Looms as Source of Friction: Tax Debate Update (Bloomberg) The Senate tax bill is headed for a marathon debate this week as Republican leaders plan to hold a floor vote as early as Thursday — but first, the measure had to go through the Budget Committee, where key GOP lawmakers were raising objections.

Trump’s Clash With Democrats Raises Risk of Government Shutdown (Bloomberg) Republicans in the U.S. Congress were cheered on Tuesday after President Donald Trump helped them get a bit closer to passing a tax overhaul in the Senate. But Trump also may have ensnarled negotiations to keep the federal government funded after money runs out on Dec. 8 by stiff-arming Democratic leaders before a scheduled White House meeting on spending.

U.K. and EU Agree on Outline Brexit Bill as Irish Block Remains (Bloomberg) U.K. and the European Union negotiators reached an outline deal on the Brexit divorce bill, clearing a hurdle in negotiations and ramping up pressure to find a compromise on the thorny issue of the Irish border. The pound surged.

Why Investors Are Unfazed by North Korea’s Missile Launch (Bloomberg) North Korea launched an intercontinental ballistic missile near Japan, but investors and analysts were unfazed by the latest provocation.

Stocks Gain With Tax, Data in Focus; Pound Rises: Markets Wrap (Bloomberg) Stocks in Europe gained, following equities from the U.S. to Asia higher as optimism over U.S. tax reform and euro-area economic growth overshadowed concerns about North Korea’s latest missile launch. The British pound strengthened after the U.K. cleared a major Brexit hurdle.

RBC quarterly profit jumps 12 per cent, beats expectations (Globe and Mail) Royal Bank of Canada saw a 12 per cent jump in its fourth-quarter net income to $2.84-billion, which pushed its net income for the full 2017 year to a record $11.47-billion.

Canada’s British Columbia lowers budget surplus forecast (Reuters) The Canadian province of British Columbia cut its 2017-18 budget surplus forecast to C$190 million ($148 million), due to tax adjustments and as the cost of fighting its worst-ever wildfire season bites, the provincial Finance Minister said on Tuesday.

Overnight markets

Overview: US 10yr note futures are down -0.175% at 124-24, S&P 500 futures are up 0.06% at 2627.5, Crude oil futures are down -0.43% at $57.74, Gold futures are down -0.58% at $1291.6, DXY is up 0.12% at 93.384, CAD/USD is up 0.21% at 0.7787.

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