Commentaires
04/12/2017
Market Update
Risk on rally after passage of US tax bill early Saturday, tsys lower yields ~3bps higher, on heavy volume in TY futures (530k), US 10Y 2.392 (+3bps). Equities higher – S&P fut +15, Euro stoxx +1.2%. The USD is higher vs the euro, lower vs GBP, unch vs CAD. GBP higher, gilts lower and wider vs bunds/tsys on speculation an agreement on Brexit talks has been achieved, EU chief negotiator Michel Barnier saying a ‘breakthrough is likely today’. GOCs lower in line with tsys, curve maintaining flatter bias from Friday’s blowout employment figures, 20% chance of rate hike this Wed. Provis trading up to start, Ont 27s @ 61, Ont 48s @71 – expectations of supply in both provis & corps given month end cpn flows.
News headlines
Senate Passes Major Business, Individual Cuts: Tax Debate Update (Bloomberg) Senate Republicans narrowly approved the most sweeping rewrite of the U.S. tax code in three decades, slashing the corporate tax rate and providing temporary tax-rate cuts for most Americans. The 51-49 vote — achieved only after closed-door deal-making with dissident senators — brings the GOP close to delivering a much-needed policy win for their party and President Donald Trump. Trump has promised to sign tax-cut legislation before the end of 2017.
Congress Talks Tax Deal as Trump Signals Corporate Rate Retreat (Bloomberg) House and Senate lawmakers say they’ll begin working Monday on compromise tax-overhaul legislation — just a couple days after President Donald Trump introduced uncertainty over a provision that could mean a difference of about $200 billion over 10 years.
U.K. Fears Brexit Breakdown as May Takes Best Offer to Lunch (Bloomberg) Brexit talks risk being torpedoed by the taboo issue of the European Court of Justice, a senior British official said, as the U.K. downplayed expectations of a breakthrough when Prime Minister Theresa May meets European officials in Brussels on Monday.
CVS to Buy Aetna for $67.5 Billion, Remaking Health Care Sector (Bloomberg) CVS will pay $207 a share for Aetna, with $145 a share in cash and the rest in stock, the companies said in a statement Sunday. That’s a 29 percent premium to Aetna’s share price on Oct. 25, the day before the companies were reported to be in talks.
Dollar Rises With Yields on Tax Plan; Stocks Jump: Markets Wrap (Bloomberg) The dollar made a strong start to the week, rising with Treasury yields and U.S. stock futures on the back of progress for the Republican tax-overhaul plan. European equities rebounded after Friday’s slump, though it was a mixed picture across Asian gauges.
Citi’s Bullish on Commodities While Warning of Risk in China (Bloomberg) Demand gains will be sustained through next year and in 2019, lifted by emerging markets as well as advanced economies, the bank said in a report. While there may be a slowdown in China, the top consumer of metals and energy and grains, stricter environmental standards and pressure to support bank balance sheets by eliminating overcapacity and curbing a glut could lead to tightness in some commodities, according to Citigroup.
Free trade talks with China will not yet begin (CBC) Canada will not begin formal free trade talks with China, at least not yet. Prime Minister Trudeau met Monday with Chinese Premier Li Keqiang at the Great Hall of the People in Beijing. A joint statement indicating talks would begin had been widely expected.
BlackBerry loses payment dispute with Nokia, to pay $137 million (Reuters) An arbitration court ordered smartphone pioneer BlackBerry Ltd to pay $137 million to Nokia to settle a payment dispute and the Canadian company said it would pursue a separate patent infringement case against the Finnish firm.
Flynn pleads guilty, is cooperating in Trump-Russia probe (Associated Press) Michael Flynn, the retired general who vigorously campaigned at Donald Trump’s side and then served as his first national security adviser, pleaded guilty Friday to lying to the FBI about reaching out to the Russians on Trump’s behalf and said members of the president’s inner circle were intimately involved with — and at times directing — his contacts.
Overnight markets
Overview: US 10yr note futures are down -0.201% at 124-06, S&P 500 futures are up 0.52% at 2657.75, Crude oil futures are down -0.93% at $57.82, Gold futures are down -0.4% at $1277.2, DXY is up 0.23% at 93.101, CAD/USD is down -0.15% at 0.7895.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.541% | 2 Year | 1.794% |
| 5 Year | 1.717% | 5 Year | 2.143% |
| 10 Year | 1.942% | 10 Year | 2.39% |
| 30 Year | 2.235% | 30 Year | 2.789% |
US Economic Data
| 10:00 AM | Factory Orders, Oct est -0.4% (-1.4% prior) |
| Factory Orders Ex Trans, Oct (0.7% prior) | |
| Durable Goods Orders, Oct est -1.0% (-1.2% prior) | |
| Durables Ex Transportation, Oct (0.4% prior) | |
| Cap Goods Orders Nondef Ex Air, Oct (-0.5% prior) | |
| Cap Goods Ship Nondef Ex Air, Oct (0.4% prior) |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Dec 1st (58.7 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
01/12/2017
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.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.418% | 2 Year | 1.778% |
| 5 Year | 1.6% | 5 Year | 2.119% |
| 10 Year | 1.842% | 10 Year | 2.376% |
| 30 Year | 2.191% | 30 Year | 2.78% |
US Economic Data
| 9:45 AM | Markit Manufacturing PMI, Nov est 54.0 (53.8 prior) |
| 10:00 AM | ISM Manufacturing, Nov est 58.3 (58.7 prior) |
| ISM Prices Paid, Nov est 67.0 (68.5 prior) | |
| ISM New Orders, Nov (63.4 prior) | |
| ISM Employment, Nov (59.8 prior) | |
| Construction Spending MoM, Oct est 0.5% (0.3% prior) | |
| 12/01 | Wards Total Vehicle Sales, Nov est 17.50m (18.00m prior) |
| Wards Domestic Vehicle Sales, Nov est 13.40m (14.02m prior) |
Canadian Economic Data
| 7:00 AM | MLI Leading Indicator MoM, Oct 0.4% (0.1% prior) |
| 8:30 AM | GDP MoM, Sep est 0.1% (-0.1% prior) |
| GDP YoY, Sep est 3.3% (3.5% prior) | |
| Quarterly GDP Annualized, 3Q est 1.6% (4.5% prior) | |
| Net Change in Employment, Nov est 10k (35.3k prior) | |
| Unemployment Rate, Nov est 6.2% (6.3% prior) | |
| Full Time Employment Change, Nov (88.7 prior) | |
| Part Time Employment Change, Nov (-53.4 prior) | |
| Participation Rate, Nov (65.7 prior) | |
| 9:30 AM | Markit Canada Manufacturing PMI, Nov (54.3 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
30/11/2017
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.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.434% | 2 Year | 1.77% |
| 5 Year | 1.625% | 5 Year | 2.118% |
| 10 Year | 1.885% | 10 Year | 2.395% |
| 30 Year | 2.234% | 30 Year | 2.831% |
US Economic Data
| 8h30 AM | Initial Jobless Claims, Nov 25th 238k est 240k (239 prior) |
| Continuing Claims, Nov 18th 1957k est 1890k (1904k prior) | |
| Personal Income, Oct 0.4% est 0.3% (0.4% prior) | |
| Personal Spending, Oct 0.3% est 0.3% (1.0% prior) | |
| Real Personal Spending, Oct 0.1% est 0.2% (0.6% prior) | |
| PCE Deflator MoM, Oct 0.1% est 0.1% (0.4% prior) | |
| PCE Deflator YoY, Oct 1.6% est 1.5% (1.6% prior) | |
| PCE Core MoM, Oct 0.2% est 0.2% (0.1% prior) | |
| PCE Core YoY, Oct 1.4% est 1.4% (1.3% prior) | |
| 9:45 AM | Chicago Purchasing Manager, Nov (51.7 prior) |
| Bloomberg Consumer Comfort, Nov 26th est 63.0 (66.2 prior) |
Canadian Economic Data
| 8:30 AM | Current Account Balance, 3Q -19.35b est -20.00b (-16.32b prior) |
| 11/30 | CFIB Business Barometer, Nov 59.3 (57.2 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