Commentaires

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

Market Update

US tsys slightly weaker, 10Y yield 2.325% (+1bp), curve flatter led by longs after block buy in ultra longs (ULZ) at 167-04. Equity futures steady (S&P -0.75), crude higher for a 4th day 57.40 amid widening of Saudi corruption crackdown. Core Euro bonds mixed – gilt yields 2bps lower, recovering earlier losses , led by  the long end on solid demand for new 2048 gilt linker syndication amid upcoming m/e large index extension (1Y in linkers). GOCs trading higher, outperforming tsys by 0.5-1bps, 10Y approaching 1.90% (1.91 – 1.5bps). Provincials closing better bid again yest on no supply

News headlines 

Why the Next Four Days Will Be Crucial for the GOP Tax Bill (Bloomberg) The House tax-writing committee begins debate Monday on the GOP’s proposed overhaul, kicking off four frantic days for lobbyists and lawmakers to revise a bill that represents President Donald Trump’s final hope for a signature legislative achievement this year.

Trump Softens Tone on North Korea, Urges Deal on Nuclear Weapons (Bloomberg) President Donald Trump toned down his harsh rhetoric toward North Korea during a visit to Seoul, telling reporters the Pyongyang regime should “come to the table” to make a deal and refusing to rule out direct talks.

Saudi Corruption Purge Snares $33 Billion of Net Worth (Bloomberg) Crown Prince Mohammed bin Salman’s crackdown on some of Saudi Arabia’s richest and most powerful men has put $33 billion of personal wealth at risk.

Nikkei 225 Stock Average Rises to Highest Close Since 1992 (Bloomberg)  Japanese stocks rallied, with the Nikkei 225 Stock Average reaching its highest close since January 1992, bolstered by strong corporate earnings and the yen’s weakness against the dollar.

Stocks Rise as Trump Talks Asia Trade; Bonds Gain: Markets Wrap (Bloomberg) U.S. stocks climbed and bonds advanced, while the dollar slipped as President Donald Trump tried to tackle trade on his Asia tour. A crackdown on corruption in Saudi Arabia sent oil soaring to its highest price in more than two years.

With Two Months to Go, U.S. Faces ‘Mad Dash’ to Adjust to MiFID (Bloomberg) For thousands of brokers, traders and money managers based in the U.S., time is running out. A shock wave is about to emanate from Brussels, the capital of the 28-nation European Union. That may as well be the dark side of the moon for some toiling away at financial firms in the U.S. A sweeping set of financial regulations dubbed MiFID II will take hold on Jan. 3, affecting everything from investment research to the booking of transactions. Most have heard of it, but they haven’t all fully addressed what will likely become a seismic industry shift.

Valeant beats profit estimate on Bausch and Lomb strength (Reuters) Canada’s Valeant Pharmaceuticals International Inc (VRX.N) (VRX.TO) reported a better-than-expected quarterly profit due to strength in its Bausch and Lomb eye-care business, sending its shares up 11.7 percent in premarket trading.

Stephen Bronfman denies link to offshore trust, but documents show it helped expand family business (CBC) Liberal fundraiser Stephen Bronfman, under fire for his ties to an offshore trust in the Cayman Islands exposed in the Paradise Papers, insisted Monday that he « has never funded nor used offshore trusts. »

Overnight markets

Overview: US 10yr note futures are down -0.037% at 125-10, S&P 500 futures are down -0.02% at 2588.25, Crude oil futures are down -0.1% at $57.29, Gold futures are down -0.31% at $1277.6, DXY is up 0.34% at 95.08, CAD/USD is up 0.46% at 0.7835

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

US tsys trading mixed, with the curve 1bp flatter and the 10Y 0.5bps lower @2.325% on above avg volume in TY futures (330k). Tsys lagging the rise in German bunds, gilts with yields 1-2.5bps lower even as Eurozone producer prices rose 2.9% in Sep vs 2.7% forecast and oil hit a two year high, rising for a third session on the latest arrests in Saudi Arabia. SF Fed pres Williams said the Fed hould raise rates in Dec and 3 more times next year in an interview with MNI. GOCs are trading higher in line with tsys with the 10Y at a two month low 1.94%, the short end bearing the brunt of last Friday’s stronger employment data. provis opening unch after closing Fri 0.5bps tighter.

News headlines 

Texas church shooter kills at least 26 in state’s deadliest mass shooting (CBC) A man dressed in black tactical-style gear and armed with an assault rifle opened fire inside a church in a small South Texas community on Sunday, killing 26 people and wounding about 20 in what the governor called the deadliest mass shooting in the state’s history. The dead ranged in age from 5 to 72 years old.

Crackdown on Billionaires and Other Top Officials Shakes Up Saudi Arabia (Bloomberg) Even by the standards of Crown Prince Mohammed bin Salman, whose meteoric ascent has put him on the cusp of the Saudi throne at the age of 32, the Saturday night crackdown was stunning.

Oil Trades Near 2-Year High After Saudi Prince Purges Officials (Bloomberg) Oil traded near the highest level in two years after Saudi Arabia’s Crown Prince, Mohammed bin Salman, ousted officials during an anti-graft probe in the world’s biggest crude exporter.

Trump Warns Against Challenging U.S. During First Stop in Asia  (Bloomberg) President Donald Trump warned nations against challenging the U.S. as he rallied American troops in Japan on the first stop of his 11-day tour of Asia. Speaking to U.S. and Japanese military personnel on Sunday at Yokota Air Base in western Tokyo, Trump said he’d push for freedom in the region and fair trade in meetings with other leaders. He also exuded confidence in the U.S. military as tensions rise with North Korea.

Weakened Trump Looks to the ‘King of China’ to Give Him a Boost (Bloomberg) Shortly after Donald Trump’s surprise election win, Barack Obama gave some advice to President Xi Jinping in the final minutes of their last meeting as leaders of the world’s biggest economies.

Broadcom Explores Deal to Buy Chipmaker Qualcomm (Bloomberg) Broadcom Ltd. is considering a bid of more than $100 billion for Qualcomm Inc., according to people familiar with the matter, in what would be the biggest-ever takeover of a chipmaker.

The Paradise Papers Data Dump: What’s Been Reported So Far (Bloomberg) A new set of data taken from an offshore law firm again threatens to expose the hidden wealth of individuals and show how corporations, hedge funds and others may have skirted taxes. A year after the Panama Papers, a massive leak of confidential information from the Bermuda law firm Appleby Group Services Ltd. has shone another light on the use of offshore accounts.

Greater Montreal homes sold quicker in Oct. as prices rose seven per cent (CTV) Greater Montreal homes sold more quickly in October as continued strong demand propelled average prices seven per cent higher, the area’s real estate board said Monday. « The single-family home and plex markets are becoming increasingly favourable to sellers, as selling times for these property categories are falling, » said Mathieu Cousineau, president of the Greater Montreal Real Estate Board.

Canada job market shows unexpected strength, wage growth firms (Reuters) he Canadian economy added more jobs than expected in October as wages posted their biggest gain in 18 months, a sign that labor market slack could be tightening despite strong employment growth over the last year.

Overnight markets

Overview: US 10yr note futures are up 0.15% at 125-11, S&P 500 futures are down -0.05% at 2581.5, Crude oil futures are up 0.74% at $56.05, Gold futures are up 0.23% at $1272.1, DXY is up 0.02% at 94.963, CAD/USD is down 0% at 0.7835.

US Economic Data

There is no US economic Data for today.

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