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Market Update

US tsys extending highs after more China headlines – ‘sticking points remain’ and rise in Oct retail inventories (0.3% vs 0.1%) 10Y 1.735% (-2bps), S&P futures unch. Gilts sharply higher, 10Y gilt 6bps lower @0.63% lowest since Nov1 despite lower demand for auction of GBP3bln 5Y bonds (b/c 2.16 vs 2.28 in Oct), polls showing Conservative lead over Labour in UK election shrinking.  GOCs higher in line with tsys, no data until Friday’s Q3 GDP (1.3% exp). Rail strike likely to figure in next week’s BOC deliberations, with the accommodative outlook unlikely to shift from Oct, thou progress is being made in negotiations according to BN. In corps,   Morguard priced $225mln 5Y @ 270 (tight end of guidance) , deal did not look cheap yet spds still finished 7bps narrower.

News headlines

U.S. Equity Futures Drift; Treasuries Edge Higher: Markets Wrap (Bloomberg) U.S. equity futures drifted with European stocks as investors searched for signs of progress in China’s comments about prospects for a “phase-one” trade deal. Treasuries and most European sovereign bonds edged higher.

TSX futures edge lower as investors remain cautious on trade deal (Reuters) Canada’s main stock index futures fell on Tuesday, as investors awaited concrete signs of any progress in trade talks between the United States and China.

Top U.S. and Chinese trade negotiators hold phone call, discuss core issues (Reuters) Top trade negotiators from China and the United States held a phone call on Tuesday morning, China’s Commerce Ministry said, as the two sides try to hammer out a preliminary “phase one” deal in a trade war that has dragged on for 16 months.

Oil Steadies on Signs of Trade-Talks Progress, Stockpile Drop (Bloomberg) Oil steadied on signs of progress in trade talks between the U.S. and China, and estimates that American crude inventories retreated for the first time in five weeks.

Scotiabank’s wealth management drive pays off with earnings lift (BNN) Bank of Nova Scotia is putting the spotlight on its global wealth-management business for good reason.

It’s not just trade hopes fueling the U.S. stocks rally (Reuters) Wall Street stocks have leap-frogged over a host of concerns, including a stall in corporate earnings and political controversy in Washington, on their way to record highs this month.

Alibaba’s Hong Kong shares rise 6.6% on debut in heavy volume (Reuters) Alibaba Group’s (BABA.N) (9988.HK) Hong Kong shares closed their first trading session up 6.6% from the issue price after this year’s largest stock sale.

World stocks edge off highs to await U.S.-China progress (Reuters) World stocks edged off their highest in almost two years on Tuesday, but kept record levels in sight, following fresh signs that the United States and China were working to end a trade war dragging on the global economy.

Fed’s Powell Says U.S. Economy’s Glass Is ‘More Than Half Full’ (Bloomberg) Federal Reserve Chairman Jerome Powell struck an upbeat tone in gauging the ability of policy makers to extend the record U.S. economic expansion, while signaling interest rates would probably remain on hold.

Market Overview: US 10yr note futures are up 0.084% at 129-20, S&P 500 futures are up 0.04% at 3134, Crude oil futures are up 0.33% at $58.2, Gold futures are down -0.12% at $1462.1, DXY is down -0.03% at 98.297, CAD/USD is up 0.07% at 0.7515.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.578%	2 Year	1.594%
5 Year	1.491%	5 Year	1.608%
10 Year	1.456%	10 Year	1.745%
30 Year	1.565%	30 Year	2.185%

US Economic Data

08:30 AM	Advance Goods Trade Balance, Oct  Survey: -$71.0b Actual: -$66.5b  Prior: -$70.4b
	Retail Inventories MoM, Oct  Survey: 0.10% Actual: 0.30%  Prior: 0.30% Revised 0.2%
	Wholesale Inventories MoM, Oct P  Survey: 0.20% Actual: 0.20% Prior: -0.40%
09:00 AM	House Price Purchase Index QoQ, 3Q  Survey: —  Prior: 1.00%
	FHFA House Price Index MoM, Sep  Survey: 0.30%  Prior: 0.20%
	S&P CoreLogic CS 20-City MoM SA, Sep  Survey: 0.30%  Prior: -0.16%
	S&P CoreLogic CS 20-City YoY NSA, Sep  Survey: 2.01%  Prior: 2.03%
10:00 AM	Richmond Fed Manufact. Index, Nov  Survey: 5  Prior: 8
	New Home Sales, Oct  Survey: 705k  Prior: 701k
	New Home Sales MoM, Oct  Survey: 0.60%  Prior: -0.70%
	Conf. Board Consumer Confidence, Nov  Survey: 127.0 Prior: 125.9

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 trading lower, yields 0.5-1.5bp higher led by the 7Y , with the 10Y 1.785 (+1.5bps), heavier volume in TY futures inflated by Dec/Mar roll.  Equity futures higher, S&P +7.25, crude slightly higher 57.88 close to top of three month range. Headline in Global Times over the weekend suggested China and the US were close to phase one trade deal (MNI). Core EGBs mixed, gilts higher, bunds lower despite slightly weaker German IFO expectations. GOCs lower, wider vs tsys after stronger Sep Wholesale Trade (1.0% vs unch). Q3 GDP on Friday the focus for the week (1.3% exp)

News headlines

Stocks Climb After China’s IP Move; Treasuries Dip: Markets Wrap (Bloomberg) U.S. equity futures climbed along with stocks globally as investors digested China’s decision to tighten intellectual property rules, a move that may boost the chances of a trade deal between the world’s largest economies. Treasuries, the yen and gold declined.

CANADA STOCKS-TSX futures rise on hopes of U.S.-China phase-one trade deal (Reuters) Canada’s main stock index futures were up on Monday over signs that the U.S. and China would agree on a phase-one trade deal by year end.

Oil Steady Near $58 on Glimmer of Progress in Trade War Talks (Bloomberg) Oil steadied near $58 a barrel as China made a concession that could help resolve trade tensions with the U.S. that have weighed on the global economy and fuel demand.

No ‘phase two’ U.S.-China deal on the horizon, officials say (Reuters) An ambitious “phase two” trade deal between the United States and China is looking less likely as the two countries struggle to strike a preliminary “phase one” agreement, according to U.S. and Beijing officials, lawmakers and trade experts.

Chinese importers scoop up Brazilian soybeans amid U.S. trade uncertainty (Reuters) Chinese buyers scooped up at least 20 cargoes of Brazilian soybeans last week due to uncertainty over a trade deal with the United States that sent them rushing to lock in supplies, traders said on Monday.

China to raise penalties on IP theft in trade war compromise (BNN) China said it will raise penalties on violations of intellectual property rights in an attempt to address one of the sticking points in trade talks with the U.S.

China central bank warns high financial risks amid rising economic headwinds (Reuters) China needs to resolve outstanding financial risks, and must counter risks from “abnormal” market fluctuations that stem from external shocks, said the central bank on Monday, as Beijing prioritizes financial stability amid increasing challenges.

Layoffs hit farmers, chemical firms as CN Rail strike continues (BNN) Workers are receiving layoff notices and chemical companies face shutdowns as the effects of Canada’s largest rail strike in a decade ripples through the economy.

Market Overview: US 10yr note futures are down -0.133% at 129-09, S&P 500 futures are up 0.22% at 3118.25, Crude oil futures are down -0.21% at $57.65, Gold futures are down -0.57% at $1462.1, DXY is up 0.06% at 98.329, CAD/USD is up 0.05% at 0.7514.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.588%	2 Year	1.644%
5 Year	1.513%	5 Year	1.647%
10 Year	1.487%	10 Year	1.788%
30 Year	1.593%	30 Year	2.23%

US Economic Data

08:30 AM	Chicago Fed Nat Activity Index, Oct  Survey: -0.20 Actual: -0.71 Prior: -0.45
10:30 AM	Dallas Fed Manf. Activity, Nov  Survey: -3.7  Prior: -5.1

Canadian Economic Data

08:30 AM	Wholesale Trade Sales MoM, Sep  Survey: 0.00% Actual: 1.00% Prior: -1.20%
10:00 AM	Bloomberg Nanos Confidence, Nov 22  Survey: —  Prior: 56.2

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 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