Commentaires matinaux

Market Update

US tsys higher, yields 1-2.5bps lower with the 10Y 1.75% (-2.5bps), tsy curve 1bp flatter on heavier volume due to the Dec/Mar roll, prices buoyed by rally in core EGBs on weak data. UK PMI data missed (48.6 vs 50.1), gilts bull flattening with yields 4-6bps lower. GOCs higher, lagging the move in tsys by 1bp in 10s. Sep retail sales expected to have declined 0.3% m/m due to lower gas and autos (auto sales -3.7% in Sep). Poloz stuck with a neutral tone in his ‘fireside chat’ yesterday, saying monetary conditions are ‘about right’, disappointing the doves after Wilkins earlier comments.

News headlines

U.S. Equity Futures Edge Higher as Treasuries Gain: Markets Wrap (Bloomberg) U.S. equity futures edged higher while European stocks advanced as investors digested the latest headlines on the trade dispute between America and China. Treasuries rose along with most benchmark bonds in Europe after some mixed economic data.

CANADA STOCKS-TSX futures rise on U.S.-China trade optimism (Reuters) Canada’s main stock index futures were up on Friday, as investors were hopeful about China’s willingness to work with the U.S. on the trade deal.

Oil Pares Third Weekly Gain Amid Mixed Signals on Trade Deal (Bloomberg) Oil pared its third weekly advance amid mixed signals on a trade agreement between the U.S. and China, which would end an impasse that has weighed on the global economy and fuel demand.

CN Rail strike triggers emergency propane shortage in Quebec (BNN) Quebec is facing an emergency shortage of propane and shipments of oil, grain and metal are grinding to a halt as the impact of a rail strike in Canada threatened to take a multibillion-dollar chunk out of the nation’s economy.

China’s Xi says he wants to work out initial trade deal with U.S. (Reuters) China wants to work out an initial trade pact with the United States and has been trying to avoid a trade war, President Xi Jinping said on Friday, but is not afraid to retaliate when necessary.

GDP revisions put China on target to double economy, but data doubts remain (Reuters) China on Friday revised up its nominal 2018 gross domestic product (GDP) by 2.1% to 91.93 trillion yuan ($13.08 trillion), keeping it on track to achieving its goal of doubling the size of its economy by 2020 from 2010.

Bridgewater Associates bets over $1 billion on market drop: WSJ (Reuters) Bridgewater Associates LP, a hedge fund founded by billionaire Ray Dalio, has bet more than $1 billion that stock markets around the world will fall by March, the Wall Street Journal reported on Friday, citing people familiar with the matter.

ECB can’t be complacent about bubble risks: Weidmann (Reuters) The European Central Bank should not be complacent if its ultra- easy policy fuels bubbles because the tools devised to mitigate these imbalances are in their infancy, Bundesbank President Jens Weidmann said on Friday.

Market Overview: US 10yr note futures are up 0.109% at 129-20, S&P 500 futures are up 0.15% at 3108.75, Crude oil futures are down -0.32% at $58.39, Gold futures are up 0.39% at $1476.3, DXY is up 0.04% at 98.028, CAD/USD is down -0.07% at 0.7532.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.553%	2 Year	1.595%
5 Year	1.483%	5 Year	1.601%
10 Year	1.464%	10 Year	1.753%
30 Year	1.578%	30 Year	2.208%

US Economic Data

09:45 AM	Markit US Services PMI, Nov P  Survey: 51.0  Prior: 50.6
	Markit US Manufacturing PMI, Nov P  Survey: 51.4  Prior: 51.3
	Markit US Composite PMI, Nov P  Survey: —  Prior: 50.9
10:00 AM	U. of Mich. Sentiment, Nov F  Survey: 95.7  Prior: 95.7
11:00 AM	Kansas City Fed Manf. Activity, Nov  Survey: -2  Prior: -3

Canadian Economic Data

08:30 AM	Retail Sales MoM, Sep  Survey: -0.30%  Prior: -0.10%
	Retail Sales Ex Auto MoM, Sep  Survey: -0.10%  Prior: -0.20%

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys trading lower, paring earlier losses, 10Y 1.76% (+1.2bps), heavy volume in TY futures mostly due to Dec/Mar roll. Initial risk-on after comments from China Morning Post that US may delay Dec 15th tariffs. S&P futures +3.5  UK gilt yields 3bps higher, UK DMO announced two extra bond auctions for Dec, including a long gilt auction on Dec 5th. Labour also pledged to boost spending by £83bln if they win. GOCs slightly lower, 1bp tighter vs tsys – CGBs bid after weak ADP report (-22k). Poloz to speak in Toronto this morning in a ‘fireside chat’. Deputy Wilkins , in Montreal earlier this week, warned of global headwinds impacting the Canadian economy.

News headlines

U.S. Futures Fluctuate on Trade News; Bonds Drift: Markets Wrap (Bloomberg) U.S. equity futures struggled for traction as investors weighed the latest trade developments, including a bill from Congress supporting Hong Kong protesters that could complicate a deal with China. Stocks fell in Europe and Asia, while Treasuries drifted.

TSX futures edge up as China invites U.S. for fresh round of trade talks (Reuters) Canada’s main stock index futures were slightly up on Thursday, after a report that China had invited top U.S. officials for a new round of face-to-face trade talks boosted sentiment.

Oil Steady as Trade-Deal Concern Offsets Falling U.S. Stockpiles (Bloomberg) Oil steadied after Wednesday’s rally amid concern that political tensions between the U.S. and China pose another hurdle to a trade deal that could lift the global demand outlook.

Trump expected to sign Hong Kong bill despite China threats (BNN) President Donald Trump is expected to sign legislation passed by Congress supporting Hong Kong protesters, setting up a confrontation with China that could imperil a long-awaited trade deal between the world’s two largest economies.

China says it will strive to reach ‘phase one’ trade deal with U.S (Reuters) China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on Thursday, in an attempt to allay fears talks might be unraveling.

Exclusive: Trump administration to miss 2019 target for Alaska refuge oil lease sale – official (Reuters) The Trump administration will miss its target of holding the first-ever oil drilling lease sale in Alaska’s Arctic National Wildlife Refuge this year due to delays in the environmental review process, Interior Secretary David Bernhardt told Reuters.

OECD sees global growth at decade-low, blames governments’ indecision (Reuters) The global economy is growing at the slowest pace since the financial crisis as governments leave it to central banks to revive investment, the OECD said on Thursday in an update of its forecasts.

Exclusive: German exports to United States jump despite trade tensions (Reuters) Strong German exports to the United States helped Europe’s largest economy to avoid a recession in the third quarter, data showed on Thursday, as companies benefited from a weaker euro and trade diversion linked to the U.S.-China tariff dispute.

OPEC+ likely to extend oil supply cuts until June: sources (Reuters) OPEC and its allies are likely to extend existing oil output cuts when they meet next month until mid-2020, with non-OPEC oil producer Russia supporting Saudi Arabia’s push for stable oil prices amid the listing of state oil giant Saudi Aramco.

Market Overview: US 10yr note futures are down -0.169% at 129-19, S&P 500 futures are up 0.14% at 3113.25, Crude oil futures are up 0.49% at $57.29, Gold futures are down -0.39% at $1468.4, DXY is down -0.2% at 97.739, CAD/USD is up 0.05% at 0.7513.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.52%	2 Year	1.598%
5 Year	1.453%	5 Year	1.607%
10 Year	1.443%	10 Year	1.759%
30 Year	1.565%	30 Year	2.222%

US Economic Data

08:30 AM	Philadelphia Fed Business Outlook, Nov  Survey: 6.0  Prior: 5.6
	Initial Jobless Claims, Nov 16  Survey: 218k  Prior: 225k
	Continuing Claims, Nov 9  Survey: 1683k  Prior: 1683k
09:45 AM	Bloomberg Consumer Comfort, Nov 17  Survey: —  Prior: 58.0
	Bloomberg Economic Expectations, Nov  Survey: —  Prior: 49.0
10:00 AM	Leading Index, Oct  Survey: -0.10%  Prior: -0.10%
	Existing Home Sales, Oct  Survey: 5.49m  Prior: 5.38m
	Existing Home Sales MoM, Oct  Survey: 2.00%  Prior: -2.20%

Canadian Economic Data

08:30 AM

ADP Canada Releases Oct. Payroll Estimates

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys trading higher, yields 3-5bps lower with the 10Y 1.74% (-4.5bps), risk off tone after US Congress passed Hong Kong bill in support of protest, which drew rebuke from China. WSJ article said trade talks between the US and China have stalled as both sides remain divided over core issues. S&P futures off the lows, now down just 0.20% – both Target (+10% pre mkt) and Lowes beat on Q3 earnings.Core Euro bonds higher, bunds lagging the rally in tsys by 1bp, 10Y tsy/bund close to narrowest since Feb 18. Fed releases minutes from Oct 30th meeting at 2:00ET. In Canada, GOCs rallying in line with tsys -Oct CPI as expected (0.3%,1.9% y/y) with the Core 2.2% from 2.1% in Sep.

News headlines

Lowe’s to shutter 34 stores across Canada beginning in January (BNNBloomberg) Lowe’s Canada will close 34 underperforming stores, including 26 Rona locations, the company said Wednesday. The move comes following a strategic review of the North Carolina-based retailer’s operations.

Wilkins says Canada’s financial system resilient despite threats  (BNNBloomberg) Bank of Canada Deputy Governor Carolyn Wilkins cautioned against complacency in the face of financial stability risks at a time of growing global uncertainty.In a speech titled “Financial Stability in an Uncertain World,” Wilkins highlighted the need to “have the right safeguards in place” in a world of rising uncertainty — from the trade war between China and the U.S. to Brexit and social unrest in Hong Kong.

Resilient growth in Canada just got a fresh warning signal (BNNBloomberg)  For the first time this year, the Canadian economy is coming in below analyst expectations, according to a closely watched gauge of economic surprises. The index from Citigroup Inc. — which falls when data prove worse than forecast — dropped below zero on Tuesday, for the first time since December. It indicates that Canada’s growth might be slowing down at a faster pace than what analysts expect, fuelled by trade war concerns. The Canadian dollar has also weakened against the greenback this month, making it one of the worst currencies against its Group of 10 counterparts.

Beijing tariff demands may expand U.S.-China ‘phase one’ trade deal significantly (Reuters) A “phase one” trade deal between the United States and China was supposed to be a limited agreement that would allow leaders from both countries to claim an easy victory while soothing financial markets.

Shadow banks, weak lenders among euro zone’s top vulnerabilities: ECB (Reuters) A largely unregulated shadow banking sector and anemic profitability among traditional lenders are among the euro zone’s biggest financial vulnerabilities, the European Central Bank said in a biannual stability assessment on Wednesday.

Encana disappointed after investor blasts plan to redomicile (BNNBloomberg) One of the largest Encana Corp. shareholders says the oil and natural gas producer’s plan to move to the U.S. is “highly discriminatory” against Canadian investors.Letko, Brosseau & Associates Inc., which has a stake of about four per cent, will vote against Encana’s plan to relocate to the U.S., the investor said Tuesday in a statement. The Montreal-based firm says the move would force investors holding the shares through indexed Canadian funds or Canadian-only investment policies to sell the stock, likely at a loss given where the shares are now trading.

Target soars after raising outlook, avoiding U.S. retail gloom  (BNNBloomberg) Target Corp. surged after raising its full-year outlook again on strong sales and profitability, providing a safe haven after several retailers unnerved investors.Third-quarter comparable sales, a key retail metric, rose 4.5 per cent, a full percentage point above what analysts polled by Consensus Metrix had projected. Profit this year excluding some items will be between US$6.25 and US$6.45 a share, Target said Wednesday. The shares rose as much as 12 per cent in early trading, nearing what would be an intraday high.

Market Overview: US 10yr note futures are up 0.205% at 129-23, S&P 500 futures are down -0.19% at 3112.5, Crude oil futures are up 0.62% at $55.55, Gold futures are down -0.19% at $1471.5, DXY is up 0.15% at 98.004, CAD/USD is up 0.25% at 0.7518.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.496%	2 Year	1.576%
5 Year	1.42%	5 Year	1.589%
10 Year	1.408%	10 Year	1.745%
30 Year	1.546%	30 Year	2.216%

US Economic Data

07:00 AM	MBA Mortgage Applications, 42309  Survey: —  Actual: -2.20% Prior: 9.60%
10:30 AM	DOE U.S. Crude Oil Inventories, 42309  Survey: 1500k  Prior: 2219k
	DOE U.S. Gasoline Inventories, 42309  Survey: 750k  Prior: 1861k
02:00 PM	FOMC Meeting Minutes, 11232  Survey: —  Prior: —

Canadian Economic Data

08:30 AM	CPI NSA MoM, Oct  Survey: 0.30%  Actual: 0.30% Prior: -0.40%
	CPI YoY, Oct  Survey: 1.90%  Actual: 1.90% Prior: 1.90%
	Consumer Price Index, Oct  Survey: 136.6 Actual: 136.6 Prior: 136.2
	CPI Core- Median YoY%, Oct  Survey: 2.20%  Actual: 2.20% Prior: 2.20%
	CPI Core- Common YoY%, Oct  Survey: 1.90%  Actual: 1.90% Prior: 1.90%
	CPI Core- Trim YoY%, Oct  Survey: 2.10%  Actual: 2.10% Prior: 2.10%

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230