Commentaires

Market Update

US tsys trading higher, yields 3-5bps lower with the 10Y 1.74% (-4.5bps), risk off tone after US Congress passed Hong Kong bill in support of protest, which drew rebuke from China. WSJ article said trade talks between the US and China have stalled as both sides remain divided over core issues. S&P futures off the lows, now down just 0.20% – both Target (+10% pre mkt) and Lowes beat on Q3 earnings.Core Euro bonds higher, bunds lagging the rally in tsys by 1bp, 10Y tsy/bund close to narrowest since Feb 18. Fed releases minutes from Oct 30th meeting at 2:00ET. In Canada, GOCs rallying in line with tsys -Oct CPI as expected (0.3%,1.9% y/y) with the Core 2.2% from 2.1% in Sep.

News headlines

Lowe’s to shutter 34 stores across Canada beginning in January (BNNBloomberg) Lowe’s Canada will close 34 underperforming stores, including 26 Rona locations, the company said Wednesday. The move comes following a strategic review of the North Carolina-based retailer’s operations.

Wilkins says Canada’s financial system resilient despite threats  (BNNBloomberg) Bank of Canada Deputy Governor Carolyn Wilkins cautioned against complacency in the face of financial stability risks at a time of growing global uncertainty.In a speech titled “Financial Stability in an Uncertain World,” Wilkins highlighted the need to “have the right safeguards in place” in a world of rising uncertainty — from the trade war between China and the U.S. to Brexit and social unrest in Hong Kong.

Resilient growth in Canada just got a fresh warning signal (BNNBloomberg)  For the first time this year, the Canadian economy is coming in below analyst expectations, according to a closely watched gauge of economic surprises. The index from Citigroup Inc. — which falls when data prove worse than forecast — dropped below zero on Tuesday, for the first time since December. It indicates that Canada’s growth might be slowing down at a faster pace than what analysts expect, fuelled by trade war concerns. The Canadian dollar has also weakened against the greenback this month, making it one of the worst currencies against its Group of 10 counterparts.

Beijing tariff demands may expand U.S.-China ‘phase one’ trade deal significantly (Reuters) A “phase one” trade deal between the United States and China was supposed to be a limited agreement that would allow leaders from both countries to claim an easy victory while soothing financial markets.

Shadow banks, weak lenders among euro zone’s top vulnerabilities: ECB (Reuters) A largely unregulated shadow banking sector and anemic profitability among traditional lenders are among the euro zone’s biggest financial vulnerabilities, the European Central Bank said in a biannual stability assessment on Wednesday.

Encana disappointed after investor blasts plan to redomicile (BNNBloomberg) One of the largest Encana Corp. shareholders says the oil and natural gas producer’s plan to move to the U.S. is “highly discriminatory” against Canadian investors.Letko, Brosseau & Associates Inc., which has a stake of about four per cent, will vote against Encana’s plan to relocate to the U.S., the investor said Tuesday in a statement. The Montreal-based firm says the move would force investors holding the shares through indexed Canadian funds or Canadian-only investment policies to sell the stock, likely at a loss given where the shares are now trading.

Target soars after raising outlook, avoiding U.S. retail gloom  (BNNBloomberg) Target Corp. surged after raising its full-year outlook again on strong sales and profitability, providing a safe haven after several retailers unnerved investors.Third-quarter comparable sales, a key retail metric, rose 4.5 per cent, a full percentage point above what analysts polled by Consensus Metrix had projected. Profit this year excluding some items will be between US$6.25 and US$6.45 a share, Target said Wednesday. The shares rose as much as 12 per cent in early trading, nearing what would be an intraday high.

Market Overview: US 10yr note futures are up 0.205% at 129-23, S&P 500 futures are down -0.19% at 3112.5, Crude oil futures are up 0.62% at $55.55, Gold futures are down -0.19% at $1471.5, DXY is up 0.15% at 98.004, CAD/USD is up 0.25% at 0.7518.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.496%	2 Year	1.576%
5 Year	1.42%	5 Year	1.589%
10 Year	1.408%	10 Year	1.745%
30 Year	1.546%	30 Year	2.216%

US Economic Data

07:00 AM	MBA Mortgage Applications, 42309  Survey: —  Actual: -2.20% Prior: 9.60%
10:30 AM	DOE U.S. Crude Oil Inventories, 42309  Survey: 1500k  Prior: 2219k
	DOE U.S. Gasoline Inventories, 42309  Survey: 750k  Prior: 1861k
02:00 PM	FOMC Meeting Minutes, 11232  Survey: —  Prior: —

Canadian Economic Data

08:30 AM	CPI NSA MoM, Oct  Survey: 0.30%  Actual: 0.30% Prior: -0.40%
	CPI YoY, Oct  Survey: 1.90%  Actual: 1.90% Prior: 1.90%
	Consumer Price Index, Oct  Survey: 136.6 Actual: 136.6 Prior: 136.2
	CPI Core- Median YoY%, Oct  Survey: 2.20%  Actual: 2.20% Prior: 2.20%
	CPI Core- Common YoY%, Oct  Survey: 1.90%  Actual: 1.90% Prior: 1.90%
	CPI Core- Trim YoY%, Oct  Survey: 2.10%  Actual: 2.10% Prior: 2.10%

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 slightly lower, 10Y 1.815%, TY futures drifting lower in narrow range on low volume (275k). Equity futures higher (S&P +7.75, Nasdaq +0.40%) despite Home Depot being down 4% pre-mkt after missing on revenues and cutting its full year forecast.  Core EGBs mixed, UK gilts slightly higher, bund yields 1bp higher.  Oct Housing Starts on tap in the US, yet mkts more sensitive to developments on the trade front.  Canadian data picks up with Sep Manufacturing Sales ahead of key CPI data tomorrow.  CMB 29 deal expected to price this morning in the area of 39.5 (old CMBs 38.5/38). Ontario announced plans to reopen its 2025 green bond in the near future

News headlines

U.S. Futures Advance With Stocks; Treasuries Drift: Markets Wrap (Bloomberg) U.S. equity futures advanced with stocks in Europe as investors kept an eye out for fresh signs of progress in America-China trade negotiations. Treasuries were steady.

TSX futures rise on hopes of U.S.-China trade deal (Reuters) Canada’s main stock index futures were higher on Tuesday, lifted by hopes that U.S. and China may end their trade war.

Oil Declines a Second Day on U.S. Supplies, Trade Deal Impasse (Bloomberg) Oil dropped for a second day on indications American crude stockpiles and shale output will keep expanding, while investors wait for a breakthrough in U.S.-China trade talks.

Thousands of Canadian National Railway workers go on strike (Reuters) About 3,000 workers of Canadian National Railway (CNR.TO), the country’s largest railroad operator, went on strike on Tuesday, labor union Teamsters Canada said after both parties failed to resolve contract issues.

Global economy dodges recession by narrowest of margins: Kemp (Reuters) The global economy may have narrowly avoided a recession, with most industrial and financial indicators pointing to a slight improvement in September-October after a sharp slowdown in the middle of the year.

Trump’s ‘Section 232’ autos tariff authority runs out of time, experts say (Reuters) The clock has run out on President Donald Trump’s authority to impose “Section 232” tariffs on imports of foreign-made cars and auto parts, and he may have to find other means if he wants to pursue tariffs on European or Japanese cars, legal experts say.

Japan lower house passes U.S. trade deal; auto tariffs still in question (Reuters) Japan’s lower house of parliament approved on Tuesday a limited trade deal Prime Minister Shinzo Abe agreed with the United States, clearing the way for tariff cuts next year on items including U.S. farm goods and Japanese machine tools.

Sustainable investors face squeeze as larger firms move in (Reuters) Specialized fund managers who pioneered green investing for decades are missing out on some of the spoils as the sector goes mainstream and large firms move in.

AFL-CIO’s Trumka says more work remains on U.S.-Mexico-Canada trade deal (Reuters) A major U.S. labor leader on Monday said there was more work to do on a new U.S.-Mexico-Canada trade agreement, pushing back against comments from House Speaker Nancy Pelosi that a breakthrough was imminent.

Shares scale 22-month peak as focus turns to growth (Reuters) World shares touched their highest in nearly two years on Tuesday on predictions of future growth and bets the United States and China can end their damaging trade war.

Market Overview: US 10yr note futures are down -0.06% at 129-08, S&P 500 futures are up 0.23% at 3129, Crude oil futures are down -1.02% at $56.47, Gold futures are down -0.24% at $1468.3, DXY is up 0.03% at 97.821, CAD/USD is up 0.07% at 0.7568.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.549%	2 Year	1.604%
5 Year	1.488%	5 Year	1.639%
10 Year	1.489%	10 Year	1.815%
30 Year	1.621%	30 Year	2.296%

US Economic Data

08:30 AM	Housing Starts, Oct  Survey: 1320k Actual: 1314k  Prior: 1256k
	Building Permits, Oct  Survey: 1385k Actual: 1461k Prior: 1387k
	Housing Starts MoM, Oct  Survey: 5.10% Actual: 3.80% Prior: -9.40%
	Building Permits MoM, Oct  Survey: -0.40% Actual: 5.00% Prior: -2.70%

Canadian Economic Data

08:30 AM	Manufacturing Sales MoM, Sep  Survey: -0.50%  Actual:-0.20% Prior: 0.80%
	Teranet/National Bank HPI MoM, Oct  Survey: —  Actual:-0.10%  Prior: 0.10%
	Teranet/National Bank HPI YoY, Oct  Survey: — Actual:1.00%  Prior: 0.70%
	Teranet/National Bank HP Index, Oct  Survey: — Actual:227.60 Prior: 227.72

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 moving higher as 10Y  1.82% (-1.5bps), volume in TY futures picking up after an avg o/n session (now 465k) as equities pullback from  record highs on rumours that China would delay talks on trade due to the impeachment hearings according to a tweet from CNBC, S&P futures -3 after being +10 ~8:00ET.     GOCs higher, lagging the rise in tsys, 10Y 1.47% (-0.5bps). Quiet on the data front today yet key CPI and Retail Sales later in the week.

News headlines

U.S. Futures Rise as Stocks Are Mixed; Pound Gains: Markets Wrap (Bloomberg) U.S. equity futures began the week with modest gains while share gauges across Europe and Asia were mixed as investors awaited fresh developments on global trade. The pound strengthened as the Conservative Party maintained its poll lead less than a month before elections.

CANADA STOCKS-TSX futures up on trade optimism (Reuters) Futures for Canada’s main stock index were higher on Monday, getting a boost from rising optimism around a U.S.-China trade deal.

Oil Holds Near Eight-Week High on U.S.-China Trade Deal Optimism (Bloomberg) Oil held near the highest close in eight weeks on signs of progress in the prolonged U.S.-China trade war, which has weighed on the outlook for fuel demand.

Banks and funds lower red flags on supercharged stocks (Reuters) A raft of major banks and fund managers have upgraded their view on global equities, with emerging-market stocks their top pick to benefit from signs of easing in the Sino-U.S. trade dispute.

Parts with passports: how free trade drives GM’s engines (Reuters) Long before the pistons for General Motors Co V-6 engines reach the U.S. No. 1 automaker’s Romulus, Michigan plant, they are seasoned international travelers.

UK’s Johnson drops corporate tax cuts to fund spending as election nears (Reuters) British Prime Minister Boris Johnson said on Monday he was putting on hold further cuts in corporation tax and told voters he would pump the money into services such as health instead, addressing a central issue in the Dec. 12 election.

Nearly 20% of Japan households using e-money but cash still king (Reuters) Almost a fifth of Japanese households use electronic money for small purchases, a survey by a central bank-affilated research institute showed, up from a year ago and a sign the country’s cash-hoarding culture is changing.

The Case Is Only Growing for an Economic Forever War (Bloomberg) President Donald Trump’s trade war with China has become a bigger, broader economic forever war. It’s hard to look ahead and see any outcome that undermines that emerging reality. A “phase one” deal may be in what U.S. officials say is its messy end stages. But that deal, if it comes, will be partial and more ceasefire than game changer. It also doesn’t mean a larger peace is nigh.

Market Overview: US 10yr note futures are down -0.097% at 129-01, S&P 500 futures are up 0.18% at 3124, Crude oil futures are down -0.47% at $57.45, Gold futures are down -0.67% at $1458.7, DXY is down -0.05% at 97.946, CAD/USD is down -0.01% at 0.7564.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.555%	2 Year	1.625%
5 Year	1.501%	5 Year	1.665%
10 Year	1.504%	10 Year	1.848%
30 Year	1.642%	30 Year	2.323%

US Economic Data

10:00 AM	NAHB Housing Market Index, Nov  Survey: 71.00  Prior: 71.00
04:00 PM	Net Long-term TIC Flows, Sep  Survey: —  Prior: -$41.1b
	Total Net TIC Flows, Sep  Survey: —  Prior: $70.5b

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Nov 15  Survey: —  Prior: 57.00

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