Commentaires

Market Update

US tsys lower, yields ~2bps higher led by the 10Y @ 2.564 (+2.6bps).  Tsys weaker after BOJ kept policy unch, USD/JPY +0.7%, after yesterday’s late day ftq rally on Berlin attack & shooting of Russian ambassador, thou thin volumes seen exacerbating moves in tsy & bund futures. Core Euro bonds also lower led by 5Y bunds , increase in German PPI to 0.3% above 0.1% exp.   GOCs lower , outperforming tsys in the pullback by ~2bps in 10s, provi spds unch. Not much to go on in terms of econ data until Thursday’s CPI/retail sales & Friday Oct GDP. The BOC auctions $3.9bln in Feb 19s (2Ys) with the Feb19/2Y roll steady at 2.5bps. 2Y yields are ~11bps higher since the last auction on Nov 30th, thou the curve has also bear steepened as the short end has been relatively more anchored by the on-hold BOC policy stance.

News headlines

Stocks Climb as Markets Show Resilience; Bonds Drop With Gold (Bloomberg) European stocks climbed to their highest this year, while bonds and gold fell, demonstrating markets’ increasing resilience to geopolitical shocks. The yen slid after the Bank of Japan maintained its stimulus plan.

BOJ upbeat on economy, Kuroda shrugs off talk of rate hike (Reuters) Bank of Japan Governor Haruhiko Kuroda offered an upbeat view of the economy but sought to douse market talk the central bank may soon consider raising interest rates, vowing instead to keep policy loose to achieve the BOJ’s 2 percent inflation goal.

Oil rises on expected U.S. crude stocks draw (Reuters) Oil prices edged higher on Tuesday on forecasts of a steep draw in U.S. crude oil stocks that could indicate a global oversupply is starting to shrink. Benchmark Brent crude oil futures LCOc1 were trading up 54 cents at $55.46 a barrel at 1124 GMT. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were up 23 cents at $52.35 per barrel.

Obama Said to Use 1953 Law to Block Drilling in Arctic, Atlantic (Bloomberg) President Barack Obama is preparing to block the sale of new offshore drilling rights in much of the U.S. Arctic and parts of the Atlantic, a move that could indefinitely restrict oil production there, according to two people familiar with the decision.

Canada’s CCL to buy British bank note maker Innovia for $1.1-billion (GlobeandMail) Canadian label and packaging maker CCL Industries Inc said it would buy Innovia Group, which supplies the new UK plastic five pound note that has fallen foul of vegetarians, for around $1.13-billion. The acquisition of UK-based Innovia is expected to make CCL the world leader in the fast-growing polymer banknote market.

BlackBerry posts wider quarterly loss, revenue slides (GlobeandMail) BlackBerry is reporting a third-quarter loss of $117-million (U.S.), the smallest of the current financial year. The Waterloo, Ont.-based company, which reports in U.S. currency, says the latest quarterly loss amounted to 22 cents per basic share before adjustments

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.2155% at 123-0, S&P 500 futures are up 0.27% at 2266, Crude oil futures are up 0.42% at $52.34, Gold futures are down -0.98% at $1131.5, DXY is up 0.37% at 103.52, CAD/USD is down -0.07% at 0.7462.

US Economic Data

There is no major economic news 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys higher, yields 3-4bps lower with the 10Y 2.55 (-3.7bps) in thin volumes. Tsys higher in Asia on safe haven after China seized a US underwater drone.  Core Euro bonds also higher thou volume in bund futures ~50% of recent avg., 10Y bund 0.287% (-2.8bps), with little reaction to better than expected German IFO – now at the highest since Feb 2014. No scheduled supply in the Eurozone this week, with the ECB set to wind down its purchase program on Dec 22nd until the new year. Econ data in the US scant until Thursday’s Q3 GDP, thou Fed Yellen gives a speech on the labor mkt this aft. GOCs opening higher lagging the US by  ~1bp thru the curve.  Provincial spreads closed Friday at the tightest levels of the year, opening unch this morning. Interest in FRNs picking up lately as y/e approaches and considering the spike in CDOR. Futures mkts now pricing in ~25% odds of a rate hike in Cda by the middle of next year.

News headlines 

Dollar, yields, stocks all cool their jets (Reuters) The dollar and U.S. bond yields fell on Monday while Asian shares hit a four-week low, as investors cashed in on some of their recent bets that the anticipated fiscal boost from the incoming Trump administration will support riskier assets. Wall Street hit record highs and the dollar rose to a 14-year peak last week, but as the last full trading week of the year got underway investors chose to take some of those chips off the table.

OPEC Deal Makes Oil Investors Most Bullish Since Slump Began (Bloomberg) Investors are the most optimistic on oil since the slump began two and a half years ago. Money managers boosted bets on rising West Texas Intermediate crude prices to the highest level since July 2014 after the Organization of Petroleum Exporting Countries and producers outside the group agreed to coordinate crude production cuts. Prices advanced to a 17-month high on Dec. 12 on speculation that the curbs will reduce the global inventory glut next year.

Japan Has Trade Surplus for 3rd Month as Imports Fall (Bloomberg) Japan posted a trade surplus for a third straight month in November as imports continued to fall faster than exports. Export values declined at the slowest pace since September 2015, with exports to China rising for the first time since February.

China’s moves to cool home-price spike kick in, but issues linger (Reuters) China’s home prices rose at a slower pace in November as government lending curbs took out some heat in major cities, but a supply shortage in some places and sizable inventories elsewhere underscored challenges policymakers face trying to stabilize a polarized market.

Neutral PBOC Sets Up First U.S.-China Tightening Since 2006 (Bloomberg) China’s leaders are pledging a harder push to rein in risk next year and emphasizing prudent and neutral monetary policy. With the Federal Reserve flagging a steeper interest-rate path, that sets the scene for the first U.S.-China tightening since 2006.

Carney Advances BOE Overhaul as Brexit, Trump Jolt World Order (Bloomberg) The Bank of England appointed a new international director to lead the team responsible for its strategy toward European and global matters, part of Governor Mark Carney’s revamp in the wake of the Brexit vote.

‘What does not change, dies’: Bombardier Transportation head looks to the future (Financial Post) The president of Bombardier Transportation, in New York this week to discuss trains, not planes, dismisses the idea that the time and money poured into the troubled aircraft over the past eight years distracted the parent company from his own division, which is responsible for more than half the company’s revenue and most of its global manufacturing presence, with operations in more than 60 countries.

Overnight markets                                                                     

Overview: US 10yr note futures are up 0.318% at 123-7, S&P 500 futures are up 0.08% at 2257, Crude oil futures are down -0.46% at $51.66, Gold futures are up 0.33% at $1141.1, DXY is up 0.04% at 102.99, CAD/USD is up 0.36% at 0.747

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys higher, yields 2-3bps lower with the 10Y 2.57% (-3bps) and the curve ~3bps flatter.  Similar story in Canada, GOC yields lower, 10Y 1.796 (-3.5bps). Tsys well bid thru the Asia, supported by JGBs where 30Y yields fell another 7bps (13bps this week) as the BOJ fine tunes its yield curve control strategy to reflect the upward pressure in global yields. Core euro bonds sharply higher, l.t. bund yields 10bps lower @ 1.035%, bund futures hit daily highs earlier on news of deteriorating liquidity at Monte Paschi. GOCs & tsys paring earlier gains despite weak US Housing Starts. The belly of the GOC curve taking the brunt of the weakness for a second day, 2/5/10 surging past the highs of August. Flows yest included CB selling as WTI fell back to ~$50. Provi spds well bid all week, yest no exception, spds closing 1-5bps tighter.

News headlines 

Dollar Hits Speed Bump in Fed-Driven Rally; Bonds Stem Declines (Bloomberg) The dollar’s advance stalled as the dust settled on a new financial-market landscape created by the Federal Reserve’s shift to a tighter policy path in 2017. The greenback fell against the euro after touching the highest since 2003 on Thursday while stocks rose. Treasuries stemmed six days of declines underpinned by the Fed’s more hawkish outlook for interest-rate increases next year. Gold trimmed its sixth weekly drop, and copper fell.

Oil rises on signs of producers’ compliance with output cuts (Reuters) Oil rose on Friday, edging closer to new 17-month highs as producers showed signs of adhering to a global deal to reduce output. Brent crude futures were trading at $54.55 per barrel at 1225 GMT, up 53 cents on the previous day’s close. U.S. West Texas Intermediate (WTI) crude was up 33 cents at $51.23 per barrel.

Poloz sticks to script after Fed hikes rates (GlobeandMail) Bank of Canada Governor Stephen Poloz suggested that rising U.S. and global bond-market interest rates are leaning against the Canadian central bank’s stimulative low-rate policies, in the bank’s latest signal that it has no intention to follow the U.S. Federal Reserve’s lead in raising its official rate.

Battered euro and yen recover after dollar surge (Reuters) The euro, yen and pound all recovered some ground against the dollar on Friday after slides of 3 percent or more in reaction to the Federal Reserve’s steer on U.S. interest rates next year. Before the Fed meeting on Wednesday, markets had seen little chance of another surge in the dollar before the end of the year.

Paschi Gets Approval to Extend Bond Swap Offer to Dec. 21 (Bloomberg) Banca Monte dei Paschi di Siena SpA received regulatory approval to extend and expand a debt-for-equity swap in a last-ditch effort to raise 5 billion euros ($5.2 billion) privately and avoid a state rescue. The exchange offer will involve about 4.5 billion euros of Tier 1 and Tier 2 securities and will start Friday and run until 2 p.m. on Dec. 21, the Siena-based bank said in a statement. Monte Paschi, which faces a Dec. 31 deadline to complete the fundraising, will also promote a swap on 1 billion euros of hybrid securities issued in 2008 known as FRESH at 23.2 percent of face value, the lender said in a filing on its website.

Statoil’s exit is the starkest sign yet Canada’s oilsands resource has lost its lustre (Financial Post) Not long ago, Norway’s Statoil ASA was going to build a $10 billion oilsands project in Alberta, put its reputation on the line to defend the deposits in its home country against a smear campaign led by Greenpeace, and even contemplated a massive upgrader near Edmonton. It all came to a halt late Wednesday when Statoil sold out of the oilsands altogether at a loss, leaving it with no operated assets in Western Canada.

Bombardier says its worst days are behind it, as executives make their pitch to investors (Financial Post) Bombardier Inc. will burn through less cash and earn higher margins, profit and revenue in 2017, a sign that the company’s worst days are behind it, company executives told investors Thursday in New York. Bombardier is one year into a five-year turnaround plan initiated by chief executive Alain Bellemare, who was appointed in early 2015 at the depths of the company’s crisis. Bombardier was struggling to bring the CSeries jetliner, its biggest aircraft ever, to market amid delays and cost overruns, while also pouring resources into several other big programs as revenues shrank and losses widened.

Overnight markets                                                                     

Overview: US 10yr note futures are up 0.0254% at 122-31, S&P 500 futures are up 0.19% at 2262.75, Crude oil futures are up 0.77% at $51.29, Gold futures are up 0.45% at $1134.9, DXY is down -0.05% at 102.97, CAD/USD is up 0.2% at 0.7484.

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230