Commentaires

Market Update

Tsys trade slightly weaker, US 10Y 2.33%, heavy volume in TY futures 9>535k) mostly due to Dec/Mar roll ahead of Thursday’s first notice. Equities firmer in Europe led by energy, after Royal Dutch Shell (+3.25%) boosted guidance and restored its dividend.  Crude down another 0.60% 57.75 even as OPEC is set to announce extension of production cuts on Thursday. Core EGBs mixed, bund curve flatter, 10Y bund 0.4bps lower @ 0.338% a two-week low. GOCs well bid, outperforming tsys ~1bp in 10s after yesterday’s 1.5bp narrowing after a large block trade in CGBs yest morning. Provis trading down 0.5bps to start ahead of supply – new long Ont 2049 exp, Ont 48/46 roll -1.7bps so ~-1bp thru Ont 48s  makes sense.

News headlines 

GOP Panel Members Threaten to Bottle Bill Up: Tax Debate Update (Bloomberg) The Senate tax bill is headed for a marathon debate this week with the aim to hold a floor vote as early as Thursday. Should it pass, Republican leaders will have to hammer out a compromise between different provisions in the House and Senate bills.

Jerome Powell Sees Rates Rising Somewhat Further (Bloomberg) President Donald Trump’s nominee to head the Federal Reserve is making one thing clear as he prepares to testify before lawmakers: He’s not here to shake things up at the U.S. central bank.

Fox Says U.K. Has Done Enough for Brexit Talks to Move Forward (Bloomberg) U.K. Trade Secretary Liam Fox called on the European Union to allow Brexit negotiations to move on to future trade links, saying his government has done enough to satisfy the bloc’s demands for money.

Oil Extends Declines Before OPEC Meeting on Output-Cut Extension (Bloomberg) Brent crude slipped toward $63 a barrel before OPEC and its allies meet this week to discuss prolonging their output cuts beyond March. Futures dropped as much as 1.2 percent in London, extending Monday’s decline. Uncertainty over the outcome of Thursday’s meeting is creating the risk of a slide in prices, which have gained on assumptions that the curbs will be prolonged for nine months, according to Goldman Sachs Group Inc. OPEC backs such an extension but is still waiting for commitments from Russia, according to people familiar with the matter.

Asian Stocks Fall for a Second Day Amid North Korea Missile Risk (Bloomberg) Asian stocks declined for a second day as investors turned cautious after reports that North Korea may be preparing a missile launch. The MSCI Asia Pacific Index lost 0.1 percent to 172.13 as of 4:45 p.m. in Hong Kong, led by material stocks such as BHP Billiton Ltd. Japanese stocks dropped as the yen unwound gains spurred by North Korea reports. Stocks in South Korea gained.

Stocks Rise as Energy Shares Jump; Dollar Steady: Markets Wrap (Bloomberg) Stocks in Europe advanced as energy companies gained after a bullish outlook from one of the sector’s bellwethers. The dollar and Treasury yields edged higher ahead of a Federal Reserve confirmation hearing and debate on U.S. tax reform.

Scotiabank bids $2.9 billion to buy majority stake in BBVA Chile (Financial Post) Scotiabank says it has submitted an offer to buy a majority stake in a Chilean bank for $2.9 billion. Scotiabank (TSX:BNS) seeks to acquire Banco Bilbao Vizcaya Argentaria, S.A.’s (BBVA) shares in its Chilean banking operation, BBVA Chile. The Canadian bank, which releases its quarterly results early Tuesday, says BBVA is willing to accept the deal if its minority partner, the Said family, does not exercise its right of first refusal under a shareholders agreement. BBVA currently owns 68.19 per cent of BBVA Chile and the Said family owns 31.62 per cent. he transaction would double Scotiabank’s market share in Chile to approximately 14 per cent and would be in line with Scotiabank’s strategy to increase scale within Chile and the Pacific Alliance countries.

Crunch looms as house correction puts some Canadians under water (Reuters) A drop in Canadian home prices has put some recent buyers under water, particularly in Toronto, the nation’s largest market, just as rising interest rates and record levels of household debt have put the squeeze on borrowers.

Overnight markets

Overview: US 10yr note futures are down -0.025% at 125-03, S&P 500 futures are up 0.11% at 2604.5, Crude oil futures are down -0.72% at $57.69, Gold futures are up 0.02% at $1299.2, DXY is up 0.17% at 93.059, CAD/USD is up 0.19% at 0.7816. 

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 mixed, curve flatter, US 10Y 2.33% (-1bp), heavy volume in TY futures (>600k) mostly due to roll, equities steady (Euro equities -0.2%, S&P futures -1) Tsy 2s10s curve reaching new lows in front of supply, bear flatteners put on in Europe, long tsys bid along with bunds. Flattening trend in tsy curve is poised to continue this week – double auction today with $26bln 2Y at 11:30 and $34bln 5Y at 1:00pm, while the Bloomberg Nov index extension for USTs is 0.11yrs longer than the avg (0.09) yrs due to Nov being a refunding month.  Coe EGBs higher led by long bunds, paying flows in 2 & 5Y EUR swaps, firmer EU peripheral spds. In Canada, GOCs unch, lagging the rally in tsys by ~1bp in longs. Provis opening unch, spds 2-2.5bps tighter on the week. Relatively busy week in terms of data – Tuesday BOC FSR  and Q3 GDP & employment on Friday.

News headlines 

The GOP Tax Plan Is Entering Its Make-or-Break Week (Bloomberg) The $1.4 trillion item on President Donald Trump’s wish list — a package of tax cuts for businesses and individuals that he has said he wants to sign before year’s end — is headed into the legislative equivalent of a Black Friday scrum next week.

Germany’s Standoff Eases as Wrangling Shifts to Coalition Terms (Bloomberg) Germany’s political stalemate showed signs of easing as the Social Democrats started haggling over terms of a renewed coalition with Chancellor Angela Merkel’s conservative bloc rather than outright blocking an alliance between Germany’s two biggest parties.

U.K. Faces Brexit Deadline on Ireland as Varadkar Clings On (Bloomberg) Prime Minister Theresa May has a week to find a compromise on the conflicting Brexit demands from the north and south of Ireland, just as a political scandal threatening the Irish government could further undermine her chances of success.

Technology Stocks Drag Asia Lower as Morgan Stanley Downgrades (Bloomberg) Asian stocks retreated from Friday’s record after Morgan Stanley downgraded Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., saying their shares had risen too much.

Stocks Decline as Metal Prices Drop; Dollar Slips: Markets Wrap (Bloomberg) European equities retreated as a slump in industrial metals weighed on mining stocks. The dollar extended a decline and Treasuries edged higher as investor focus returned to the U.S. economy and tax reform at the start of a week packed with potential market catalysts.

Canada posts larger September budget deficit as expenditures increase (Reuters) Canada’s budget deficit increased in September compared with the previous year as government spending on programs increased at a faster rate than revenues, the finance department said on Friday.

OSC adjourns hearing on Rhone investment in Hudson’s Bay (Reuters) The Ontario Securities Commission (OSC) adjourned a hearing on Friday of activist fund Land and Buildings’ appeal against a conditional approval for a $500 million investment in luxury retailer Hudson’s Bay Co from Rhone Capital.

TSX futures lower as oil prices slip (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Monday, as oil prices slipped with U.S. crude easing from two-year highs on prospects of higher output.

Overnight markets

Overview: US 10yr note futures are up 0.025% at 125-00, S&P 500 futures are down 0% at 2601, Crude oil futures are down -1.14% at $58.28, Gold futures are up 0.54% at $1298.8, DXY is down -0.18% at 92.614, CAD/USD is down -0.22% at 0.7883. 

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

US tsys lower , yields 1.5bps-2bps higher with the 10Y 2.335%, weakening along with European bonds on stronger German Nov IFO business sentiment, stronger European equities. Next week looks to be heavy in the US in terms of corporate and tsy issuance: corp issuance expected to pick up after quiet week , estimates of $27-30bln according to MNI, while the US issues 2, 5 & 7Y notes for $88bln.  In Canada, GOCs lower in line with tsys, 10Y 1.91%.  Third quarter GDP, scheduled for next Friday, is forecast to have declined to 1.6% from 4.6% in Q2.  Yesterday’s weak Sep retail sales lowered the ISFD ‘nowcast’ estimate for Q3 from 1.91% to 1.75%.  Odds of a rate hike on Dec 6th have dropped to 14% based on OIS, the lowest yet, from 80% in Sep. The GOC curve (using 2s10s) is also the steepest relative to the US since March 2009. Provis opening unch, don’t expect supply with the US half day.

News headlines 

Flynn’s Lawyers Have Stopped Cooperating With Trump’s Legal Team (Bloomberg) The legal team for former National Security Adviser Michael Flynn has stopped sharing information with President Donald Trump’s lawyers about the special counsel’s investigation into Russian interference in the 2016 election, said two people familiar with the probe.

Black Friday Retailers Looking to Extend Moment of Optimism (Bloomberg) As Black Friday shoppers descend on stores this weekend, retailers are experiencing something that’s been in short supply: optimism. Brick-and-mortar chains are coming off a generally positive earnings season, with companies such as Wal-Mart Stores Inc. seeing their shares reach record highs. Even the beleaguered department-store industry is finding reasons for hope. Macy’s Inc. and its peers rallied earlier this month after giving an upbeat outlook.

German Business Optimism Climbs to Record as Economy Booms (Bloomberg) German companies are more confident than ever as they tap into the global economic upswing. A measure of the nation’s business confidence set a new record high in November. The Ifo institute’s index climbed to 117.5 from a revised 116.8, beating economists’ estimates for the gauge to remain unchanged.

After Sudden Rout, China Stock Traders Question Beijing Put (Bloomberg) What happened to the Beijing put? That’s what investors in China are asking themselves after a gauge of large-cap stocks plunged 3 percent on Thursday, rattling a market that’s grown accustomed to state support when losses get extreme. While there were signs over the past week that the government was looking to cool gains in high-flying shares like Kweichow Moutai Co. — along with concerns over rising corporate bond yields — the severity of Thursday’s slump caught some traders off guard.

Stocks in Europe Gain as Bonds Decline; Oil Rises: Markets Wrap (Bloomberg) Stocks in Europe gained and the euro headed for a two-month high, while bonds fell as Germany moved closer to ending a political impasse and business confidence in the region’s biggest economy improved. The dollar steadied after three days of losses.

TSX futures rise as U.S. crude hits two-year high (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Friday as U.S. oil prices soared to a two-year high with North American markets tightening on the partial closure of the Keystone pipeline.

Canada September retail sales rise less than expected, pointing to slower growth (Reuters) Canadian retail sales rose far less than expected in September as higher gasoline prices were offset by a decline in purchases of vehicles and clothing, pointing to cooler economic growth and reinforcing expectations the central bank is on hold until next year.

Overnight markets

Overview: US 10yr note futures are down -0.075% at 125-01, S&P 500 futures are up 0.29% at 2602, Crude oil futures are up 1.24% at $58.74, Gold futures are down -0.33% at $1292.5, DXY is down -0.24% at 92.998, CAD/USD is up 0.03% at 0.7862. 

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