Commentaires

Market Update

US tsys trading weaker but off the lows after weak ADP (67k vs 135k), US 10Y 1.74% (+2.5bps), heavy volume in TY futures (855k), S&P futures +14, crude +2% 57.20.  US & China have moved closer to phase 1 trade deal according to BN, despite Trump comments yest that deal could wait until after US election. Selloff in gilts, 10Y gilt/bund spd 3bps wider, polling data show consistent lead for Tories with prospect of majority govt (MNI). GOCs lower & 2bps wider vs tsys before BOC, despite consensus of no change in rates or outlook from October.

News headlines

Stocks Rebound on Fresh Hopes for U.S.-China Deal: Markets Wrap (Bloomberg) U.S. equity futures advanced with European stocks after a news report that China and America were moving closer to a trade deal, despite heated rhetoric. Treasuries slipped along with the dollar.

TSX futures rise on higher oil prices, BoC rate decision eyed (Reuters) Canada’s main stock index futures rose on Wednesday, as oil prices gained in the run-up to meetings where OPEC and its allies are expected to extend output cuts, while investors awaited the central bank’s decision on interest rates.

Bank of Canada likely to hold and remain an outlier (BNN) Bank of Canada Governor Stephen Poloz, one of the few central bankers to resist the global push toward easier monetary policy, will probably maintain his wait-and-see approach this week.

Oil Rallies on Renewed Trade Deal Prospects Before OPEC+ Meeting (Bloomberg) Oil gained as the U.S. and China were moving closer to a trade deal and before OPEC+ decides on its output-cut policy later this week.

China warns U.S. over Uighur bill, raising doubts over early trade deal (Reuters) China warned on Wednesday that U.S. legislation calling for a tougher response to Beijing’s treatment of its Uighur Muslim minority will affect bilateral cooperation, clouding prospects for a near-term deal to end a trade war.

A pricey French import goes mainstream in Democratic primary (Reuters) U.S. Senator Elizabeth Warren has carried the idea of a wealth tax onto the center stage of American politics, but the roots were planted far away, in a young French economist’s work unraveling the flow of money through global tax havens.

EU seeks talks with U.S. on French goods tariff threat, ready to act (Reuters) The European Union would prefer talks with the United States to discuss Washington’s threat of tariffs on French luxury goods, but is ready to take action if that fails, the head of the European Commission Ursula von der Leyen said on Wednesday.

OPEC gearing up for deeper oil cuts, Russia yet to agree (Reuters) OPEC is gearing up to deepen production cuts later this week but still needs to agree with allies such as Russia over details of a deal to support oil prices and head off a looming oil glut next year.

U.S. private sector job growth at six-month low in November: ADP (Reuters) U.S. private employers added the fewest jobs in six months in November, well shy of economists’ expectations, a report by a payrolls processor showed on Wednesday.

Explainer: ECB to soul-search over policy goals (Reuters) The European Central Bank will conduct an overarching review of its policy strategy soon, looking at everything from the definition of its inflation target to fighting climate change.

Market Overview: US 10yr note futures are down -0.24% at 129-23, S&P 500 futures are up 0.47% at 3105.5, Crude oil futures are up 1.78% at $57.1, Gold futures are down -0.07% at $1483.3, DXY is down -0.08% at 97.654, CAD/USD is down -0.16% at 0.7534.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.579%	2 Year	1.554%
5 Year	1.517%	5 Year	1.57%
10 Year	1.494%	10 Year	1.745%
30 Year	1.592%	30 Year	2.195%

US Economic Data

07:00 AM	MBA Mortgage Applications, Nov 29  Survey: —  Actual: -9.20% Prior: 1.50%
08:15 AM	ADP Employment Change, Nov  Survey: 135k Actual: 67k Prior: 125k
09:45 AM	Markit US Services PMI, Nov F  Survey: 51.6  Prior: 51.6
	Markit US Composite PMI, Nov F  Survey: —  Prior: 51.9
10:00 AM	ISM Non-Manufacturing Index, Nov  Survey: 54.5  Prior: 54.7

Canadian Economic Data

08:30 AM	Labor Productivity QoQ, 3Q  Survey: 0.20% Actual: 0.20% Prior: 0.20%
10:00 AM	Bank of Canada Rate Decision, Dec 4  Survey: 1.75%  Prior: 1.75%

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 rallying since mid-morning, 10Y 1.785% (-3.5bps), heavy volume in TY futures (600k). Tsy prices were drifting lower until Trump comments ~5:00ET that the China deal might have to wait until after the 2020 presidential election.  Stock futures at the lows, S&P -22 (-0.70%), Dow -245, crude -0.60%. Core Euro bonds higher, lagging the move in tsys by 1bp in 10s.   GOCs higher, 10Y 3bps lower 1.495%. BOC tomorrow – no change in rates or outlook expected.  Data have come in close to expectations, capped off by last week’s 1.3% increase in Q3 GDP which showed resilience in both consumer spending and business investment.

News headlines

U.S. Stock Futures Drop as Trump Dents Trade Hopes: Markets Wrap (Bloomberg) U.S. equity futures retreated and stocks in Europe erased a gain as President Donald Trump said he might wait up to a year to complete a trade accord with China. Safe-haven assets climbed.

TSX futures fall after Trump hints at delay in U.S.-China trade deal (Reuters) Canada’s main stock index futures fell on Tuesday, after U.S. President Donald Trump said he had no deadline for reaching a trade agreement with China, adding it could come after the U.S. presidential election in November 2020.

Oil Falls as Trump Signals Long Wait for U.S.-China Trade Deal (Bloomberg) Oil slipped below $56 as U.S. President Donald Trump said there may be a long wait for a trade agreement with China, casting doubt about the strength of demand just days before the OPEC+ meeting.

Trump says China trade deal might have to wait for 2020 election (Reuters) U.S. President Donald Trump said a trade agreement with China might have to wait until after the U.S. presidential election in November 2020, denting hopes of a quick resolution to a dispute that has weighed on the world economy.

France and EU say primed to retaliate over U.S. tariff threat (Reuters) France and the European Union said on Tuesday they are ready to retaliate if U.S. President Donald Trump acts on a threat to impose duties of up to 100% on imports of champagne, handbags and other French products worth $2.4 billion.

Trump says new U.S. law on Hong Kong doesn’t help China trade talks (Reuters) U.S. President Donald Trump said on Monday U.S. legislation backing protesters in Hong Kong did not make trade negotiations with China easier, but added he believes Beijing still wants a deal with the United States.

European shares whacked lower as Trump says China trade deal may come only after Nov 2020 election (Reuters) European shares fell back into the red on Tuesday, abandoning earlier efforts to claw their way back from three days of falls, as U.S. President Donald Trump said a trade deal with China might be delayed until after November 2020 elections.

Trump, citing U.S. farmers, slaps metal tariffs on Brazil, Argentina (Reuters) U.S. President Donald Trump ambushed Brazil and Argentina on Monday, announcing tariffs on U.S. steel and aluminum imports from the two countries in a measure that shocked South American officials and left them scrambling for answers.

Japan preparing $120 billion stimulus package to bolster fragile economy (Reuters) Japan is preparing an economic stimulus package worth $120 billion to support fragile growth, two government officials with direct knowledge of the matter said on Tuesday, and complicating government efforts to fix public finances.

Market Overview: US 10yr note futures are up 0.339% at 129-11, S&P 500 futures are down -0.59% at 3095.75, Crude oil futures are down -0.57% at $55.64, Gold futures are up 0.45% at $1475.8, DXY is down -0.06% at 97.799, CAD/USD is up 0.08% at 0.7508.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.581%	2 Year	1.572%
5 Year	1.511%	5 Year	1.606%
10 Year	1.5%	10 Year	1.784%
30 Year	1.596%	30 Year	2.234%

US Economic Data

12/03

Wards Total Vehicle Sales, Nov  Survey: 16.90m  Prior: 16.55m

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, 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 sharply lower, heavy volume in TY futures (685k), 10Y 1.835% (+6bps), the selloff concentrated at the longer end of the curve with 2s30s 5bps wider. Better than expected China PMIs seen driving weakness in tsys and EGBs – China Manufacturing PMI rose to 50.2 in Nov, the first expansionary reading since April. US equity futures giving up gains since early NA trading, S&P +2.5 from +13 earlier. Focus on the ISM Manufacturing Index at 10:00ET. GOCs lower, underperforming tsys by 2bps out to 10yrs. BOC meeting on Wed, no change in rates exp (<5% odds of cut), we do not see any change in the outlook – Q3 GDP was on consensus  with surprising strength in consumption and domestic demand, while policy remains accomodative

News headlines

U.S. Stock Futures Trim Gains on Trump Tariff Move: Markets Wrap (Bloomberg) U.S. equity futures pared a gain and Europe stocks turned lower as a move on tariffs by America overshadowed solid factory data and reminded investors of lingering trade risks. Government bonds slid.

CANADA STOCKS-TSX futures rise on higher oil prices (Reuters) Futures for Canada’s main stock index were higher on Monday, as oil prices rose, supported by hints that OPEC and its allies may agree to deepen output cuts at a meeting this week.

Trump says he will restore tariffs on Brazil, Argentina metal imports (Reuters) U.S. President Donald Trump on Monday said he would immediately restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina, prompting at least one counterpart to vow talks with the Republican president.

Euro zone factory activity shrank in November but worst may be over: PMI (Reuters) Euro zone manufacturing activity contracted for a 10th straight month in November although the bloc’s battered factories may have turned a corner as forward-looking indicators in Monday’s survey appear to have passed a nadir.

U.S. dollar at six-month highs vs yen, NZ dollar shines after upbeat China data (Reuters) The U.S. dollar scaled a six-month high versus the Japanese yen and New Zealand’s currency jumped to near four-month peaks on Monday after an unexpected rebound in Chinese manufacturing activity lifted hopes of a brighter outlook for world growth.

Oil Rebounds on Speculation That OPEC+ Could Deepen Output Cuts (Bloomberg) Oil rebounded from the biggest weekly loss since October on speculation that OPEC+ could defy expectations by deepening its production cuts.

Saudi Arabia wants OPEC+ to deepen oil cuts due to Aramco IPO (Reuters) OPEC and its allies plan to deepen oil cuts and have the deal in place so it runs at least until June 2020 as Saudi Arabia wants to deliver a positive surprise to the market before the listing of Saudi Aramco, two sources familiar with the talks said.

Market Overview: US 10yr note futures are down -0.338% at 128-30, S&P 500 futures are up 0.1% at 3146.75, Crude oil futures are up 1.99% at $56.27, Gold futures are down -0.5% at $1465.4, DXY is down -0.03% at 98.248, CAD/USD is up 0.13% at 0.752.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.62%	2 Year	1.624%
5 Year	1.55%	5 Year	1.662%
10 Year	1.537%	10 Year	1.829%
30 Year	1.623%	30 Year	2.268%

US Economic Data

09:45 AM	Markit US Manufacturing PMI, Nov F  Survey: 52.2  Prior: 52.2
10:00 AM	ISM Manufacturing, Nov  Survey: 49.2  Prior: 48.3
	ISM Prices Paid, Nov  Survey: 47.0  Prior: 45.5
	ISM New Orders, Nov  Survey: —  Prior: 49.1
	Construction Spending MoM, Oct  Survey: 0.40%  Prior: 0.50%

Canadian Economic Data

08:30 AM	MLI Leading Indicator MoM, Oct  Survey: — Actual: 0.40% Prior: 0.20%
09:30 AM	Markit Canada Manufacturing PMI, Nov  Survey: —  Prior: 51.2
10:00 AM	Bloomberg Nanos Confidence, Nov 29  Survey: —  Prior: 55.0

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