Commentaires

Market Update

Tsys trading sharply lower, yields 2-3bps higher on heavy volume in TY futures (515k vs 300k avg). Euro stocks lower, S&P futures -8, gold higher, crude unch 57.17. Tax reform cited as contributing to the selloff in both stocks & bonds the last couple of days, more specifically that the US Senate tax plan would delay corp tax cuts to 2019, even as the tax rate would decline to 20% from 35%. Core EGB yields higher for a second day led by  UK gilts, 10Y bund 0.39%  a two-week high, profit taking after 10Y bund yields had fallen rapidly(~ 18bps) just since ECB ‘dovish taper’ meeting Oct 26th.  Next week also sees a substantial uptick in European bond supply (~E31bln from E7.2bln this week according to MNI) from from France, Spain , Germany, Italy and the Netherlands. Provis wider for a second day led by longs, Ont 10Y 64bps – 3bps wider on the week with the Ont 48/27 curve 0.5bps steeper.

News headlines 

Trump Offers Trade to Asian Nations But Only If They Play Fair (Bloomberg) President Donald Trump told Asian nations eager for the U.S. to stay committed to the region that he would no longer join multilateral deals like the Trans-Pacific Partnership but would seek bilateral pacts — and only with countries that played by the rules and didn’t try to exploit the United States.

China Moves to Open Market for Financial Firms in Historic Step (Bloomberg) China took a major step toward the long-awaited opening of its financial system, saying it will remove foreign ownership limits on banks while allowing overseas firms to take majority stakes in local securities ventures, fund managers and insurers.

GOP’s Dueling Tax Overhauls Struggle to Pass a Key Red-Ink Test (Bloomberg) Republican tax writers in the House and Senate scoured the U.S. tax code Thursday and shook the couch cushions for loose change, as one member put it, in an all-day struggle to find ways to pay for the deep tax cuts their leaders and President Donald Trump have promised.

Get Ready for a Washington Train Wreck in December (Bloomberg) Republicans in Congress are so focused on passing a massive tax overhaul this year that they’re saying little publicly about another December deadline — the day the government would shut down if the GOP can’t reach a deal with Democrats on spending and other hot-button issues.

Stocks, Dollar Fall on Senate Tax Plan Concerns: Markets Wrap (Bloomberg) U.S. stocks stumbled Thursday, with losses widening after the Senate revealed that its tax plan would delay cuts to the corporate rate until 2019. Treasuries turned higher and the dollar extended losses.

Irish Border Throws Unexpected Hurdle Into Brexit Talks (Bloomberg) The future of the Irish border erupted unexpectedly into Brexit talks this week, as the European Union made new demands on Britain that risk distracting from efforts to reach a breakthrough by year-end.

Big Tobacco urges Canada to ensure legal nicotine competitive with black market (CTV) If the price of legal marijuana must be competitive with the black market in order to discourage underground sales, then the same logic should apply to nicotine, the head of Imperial Tobacco Canada said Thursday.

Justin Trudeau says Canada won’t be pressured into premature TPP deal, denies report ‘principle’ agreement reached  (Global News) Canada won’t be pressured into prematurely signing a deal on the Trans-Pacific Partnership, Prime Minister Justin Trudeau said Thursday as his Liberal government flatly denied media reports of a “deal in principle” on the Pacific Rim trade pact.

Overnight markets

Overview: US 10yr note futures are down -0.187% at 124-31, S&P 500 futures are down -0.29% at 2576.5, Crude oil futures are up 0.02% at $57.18, Gold futures are down -0.16% at $1285.5, DXY is down -0.02% at 94.421, CAD/USD is down -0.09% at 0.7892

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 lower yields 0.5 – 1.5bps higher with the 10Y 2.33 (+1.2bps), prices reversing early gains pressured by losses in European govt bonds. Euro equities down ~1.0%, the largest drop since August 29th , crude unch 56.90. Sharp selloff in German bunds, peripheral spds 1-2bps wider. The European commission’s new forecast sees  Eurozone GDP at 2.2% this yr vs 1.7% in the Spring, while ECB member Coeure said the Euro area recovery is the strongest ‘in almost twenty years’ . The US Treasury auctions $15bln in new 30Y bonds at 1:00pm, 30Y yields ~2.80% vs 2.87% at the last auction Oct12th which saw foreign participation rise from 8.3% to 12.2% the highest since March. GOCs trading lower, slightly underperforming tsys in the short end, provis unch after closing 1-2bps wider yest despite strong demand for BC 30y yest .

News headlines 

Trump Hits China for Unfair Trade But Blames Past U.S. Leaders (Bloomberg) President Donald Trump said China is taking advantage of American workers and American companies with unfair trade practices, but he blamed his predecessors in the White House rather than China for allowing the massive U.S. trade deficit to grow.

Saudi Billionaires Look to Move Funds to Escape Asset Freeze (Bloomberg) Wealthy Saudis are moving assets out of the region to avoid the risk of getting caught up in what authorities call a crackdown on corruption, according to six people with knowledge of the matter.

U.K. Cabinet Minister Resigns Over Secret Israeli Meetings (Bloomberg) Priti Patel resigned as U.K. international development secretary over talks with the Israeli government behind Prime Minister Theresa May’s back after more revelations of undisclosed visits came to light.

Brexit Talks Resume With EU Wary of U.K. Political Risk (Bloomberg) Brexit talks resumed Thursday with no indication that a breakthrough is in reach: the Europeans are taking a cautious approach even as both sides hope for an agreement by year-end.

Volatility Spikes, Exactly a Year After Trump Market Turmoil (Bloomberg) That’s what it seemed like late in Asian trading Thursday, when the Nikkei 225 Stock Average suddenly started to swoon, staging its biggest reversal (points-wise) since exactly a year ago. That’s when Donald Trump’s shock U.S. election victory rocked markets around the world — before they bounced back the next day

Dollar Declines as Stocks Drop; Treasuries Steady: Markets Wrap (Bloomberg) The dollar declined and Treasury yields fluctuated as President Donald Trump challenged China over what he called unfair trade practices. European stocks fell after a volatile session in Asian markets, while the euro and bund yields rose after the European Commission lifted its growth forecasts.

House Panel Set to Vote as Senate Enters Fray: Tax Debate Update (Bloomberg) It’s crunch time for Republican tax-writers on Thursday. The House Ways and Means Committee enters its final day of hammering out its tax-cut legislation, while a Senate panel plans to reveal its own version.

Airbus open to further Bombardier cooperation as it eyes Canadian fighter jet deal (Financial Post) Airbus SE could cooperate further with Bombardier Inc beyond a recent venture in the CSeries jets, if its fighter jet is permitted to compete in a Canadian military procurement, and its partners agree, an executive said on Wednesday.

Stock futures lower with earnings, housing data in focus (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Thursday as investors assessed corporate earnings and awaited monthly housing data.

Overnight markets

Overview: US 10yr note futures are down -0.075% at 125-05, S&P 500 futures are down -0.55% at 2576.75, Crude oil futures are up 0.04% at $56.83, Gold futures are up 0.26% at $1287, DXY is down -0.24% at 94.634, CAD/USD is down -0.15% at 0.7869.

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 slightly higher, flatter with the 10Y 2.313%, TY futures in a narrow overnight range on moderate volume (322k), underperforming core EGBs with some pre auction selling into $23bln 10Y auction at 1:00. Core Euro bonds higher led by gilts, curve 3bps flatter, large 7.5k block by in 10Y gilt futures with the contract at new high since Sep 14^th. 10Y bund higher for a fifth day, 10Y 0.313% . GOCs higher in line with tsys led by long end – the BOC auctions $3.7bln in 5Y bonds at 12:00pm, reopened March 2023s with the M23/S22 roll 5.5/5.3 compared to the 5Y benchmark roll @ 3.9/3.8 – both rolls fairly range bound since the first March 23 auction Oct 4^th , while the 5/10 curve is 6bps flatter.

News headlines 

Trump Lands in China Seeking Progress on Trade, North Korea (Bloomberg) President Donald Trump toured parts of Beijing on Wednesday after arriving for a high-stakes state visit where he’ll look for wins from Xi Jinping on everything from the U.S.’s massive trade deficit to reining in North Korea.

Democrats, Eyeing Midterms, Score Wins in Key Governor Races (Bloomberg) The only two governors’ races in the U.S. this year ended in victory for Democrats, as voters turned away Republicans aligned with President Donald Trump and telegraphed a fight for his party’s hold on Congress in 2018 midterm elections.

May on Brink of Losing Second Top Minister in One Week (Bloomberg) Prime Minister Theresa May ordered her international development secretary to abandon a visit to Africa and return home immediately, suggesting she’s on the point of firing a member of her cabinet as the U.K. government faces fresh turmoil in the midst of Brext talks.

Gulf Stocks Lose $6.8 Billion in 72 Hours Amid Saudi Purge (Bloomberg) Saudi Arabia’s anti-corruption purge and deepening feud with Iran have spurred a selloff across Gulf stock markets to the tune of almost $7 billion, a sign of the volatility to come as governments in the region push ahead with reforms.

Stocks Slip on Banking Earnings; Dollar Declines: Markets Wrap (Bloomberg) European equities fell, weighed down by financial shares as third-quarter earnings season continued. The dollar weakened and Treasury yields edged lower amid concern about the progress of U.S. tax reforms and as President Donald Trump arrived in China on a state visit.

Slow Down, Bulls: Four Signs This Oil Rally May Not Have Legs (Bloomberg) The rally that pushed crude to a two-year high is showing signs of losing strength, and we may soon see a reversal in prices. Here’s what to look out for in the oil market in months to come.

Encana’s profit slips 7 percent as production falls (Reuters) Canadian oil and gas producer Encana Corp’s profit fell 7.3 percent in the third quarter, hurt by lower oil and gas production. The Calgary-based company said on Wednesday its net profit slipped to $294 million or 30 cents per share in the quarter ended Sept. 30, from $317 million or 37 cents per share, a year earlier.

Overnight markets

Overview: US 10yr note futures are down -0.025% at 125-13, S&P 500 futures are down -0.07% at 2585, Crude oil futures are down -0.26% at $57.05, Gold futures are up 0.48% at $1281.9, DXY is down -0.07% at 94.851, CAD/USD is down -0.36% at 0.7854.

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