Commentaires

Market Update

Tsys trading higher led by the long end, curve 2bps flatter 2s30s, 10Y 2.388 (-1.8bps), above avg volume in TY futures (350k), short end weighed by firmer Oct PPI (0.4% vs 0.1%, overall 2.8%  highest since Feb 2012). Fed Bullard  sounding dovish saying fed funds rate appropriate for near term, need higher productivity to lift wages. Tsys declined in Asia session and then rallied in Europe led by longs. Tsy curve resuming flattening trend from last week, 5s30s at new lows 77.7, 4 bps narrower since Friday. So far not much news from ECB central bank panel in term s of monetary policy. GOCs better offered curve 2bps flatter, spds ~1bp wider vs tsys in the short end. The BOC auctions $3bln in 3Y bonds tomorrow and a $500mln in ultra longs Thursday

News headlines 

Trump Declares Trade ‘Rules Have Changed’ as Asia Trip Concludes (Bloomberg) President Donald Trump ended his swing through Asia, hailing progress toward his goal of reducing the U.S. trade deficit. Trump took off from Manila aboard Air Force One on Tuesday, skipping the final session of meetings hosted by the Association of Southeast Asian Nations. The trip, which included stops in Japan, South Korea, China and Vietnam, brought Trump in contact with dozens of leaders, including the heads of Asia’s five biggest economies and a brief encounter with Russian President Vladimir Putin.

Here’s Where the GOP Tax Plan Stands Right Now (Bloomberg) The Senate tax-writing committee continues hammering out the details of its tax cut proposal on Tuesday, while the House may vote on its bill as soon as Thursday

Powell Wants to Change How the Fed Communicates (Bloomberg) Federal Reserve Chair nominee Jerome Powell has likened central bank communication to a popular Far Side cartoon: A man chides his dog Ginger about rooting through the trash, but all the dog hears is “Blah, blah, Ginger, blah, blah blah.”

German Economy Beats Forecasts, Heads for Best Year Since 2011 (Bloomberg) German growth steamed ahead in the third quarter, keeping Europe’s largest economy on track for its best year since 2011. The 0.8 percent jump in gross domestic product was an acceleration from the previous three months and topped the 0.6 percent median forecast in a Bloomberg survey. The expansion was driven by exports and capital investment, and net trade made a positive contribution.

Stock Selloff Heads Toward U.S. as Euro Advances: Markets Wrap (Bloomberg) The equity selloff that moved from Asia to Europe looks to continue, with U.S. stock futures joining the retreat. Treasuries and bonds turned positive as the world’s most powerful central bankers spoke in Frankfurt, while the dollar weakened and the euro appreciated on German growth data.

Venezuela Creditor Meeting Is a Bust as S&P Declares Default (Bloomberg) Venezuela’s grand gathering with creditors Monday lasted all of 30 minutes and didn’t produce anything of substance. To make matters worse, S&P Global Ratings declared the country in default while Fitch Ratings cited missed payments by the state oil company.

EgyptAir signs letter of intent for up to 24 Bombardier CS300s (CBC) Montreal-based Bombardier Inc. has signed a letter of intent to sell up to 24 CS300 aircraft to EgyptAir Holding Co. The CS300 is the larger version of Bombardier’s C Series aircraft. The agreement announced at the Dubai Airshow includes 12 CS300 aircraft with purchase rights for an additional 12 aircraft.

Fifth NAFTA round reaches Mexico under shadow of U.S. tax reform (Reuters) U.S., Canadian and Mexican negotiators hope to make modest progress in the next round of NAFTA trade talks as the White House focuses on pushing tax cuts through Congress, with little sign of compromise in sight on key sticking points.

Overnight markets

Overview: US 10yr note futures are up 0.025% at 124-21, S&P 500 futures are down -0.19% at 2577, Crude oil futures are down -0.55% at $56.45, Gold futures are down -0.32% at $1274.8, DXY is down -0.4% at 94.112, CAD/USD is down -0.18% at 0.7868.

 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

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