Commentaires

Market Update

Tsys sharply lower, yields 5-6bps higher, 10Y 2.36% weighed by soaring oil on news of OPEC agreement on cut in production by 1.2mln b/d to 32.5mln, this was less than the 1.4mln b/d expected. US data mixed: ADP employment stronger, 216k vs 170k exp, thou Pers inc/spend weaker than exp. GOC yields also trending higher, 10Y 1.56% (+5bps) , Cda/US tighter 2-3bps despite a stronger Sep GDP – 0.3% vs 0.1% exp. Provi spds opening bid, spds 1bp tighter, demand is strong with Dec 1st ext and higher yields enticing buyers. Busy day in corps yest with $4bln in supply – $3bln BNS 5 & 10Y dep note, HSBC $1bln 7Y senior. The 10Y BNS looked somewhat expensive @ 107, yet given BMO 25s trade closer to 95, 12 bps is not bad. This also makes longer dated NVCC look attractive TD 4.859 31/26 @ 205.

News headlines  

U.S. stock futures rise on optimism of big OPEC output cut (Reuters) U.S. stock index futures edged up on Wednesday as oil prices soared on optimism of a bigger-than-expected output cut. Oil prices jumped 8.4 percent after Saudi Arabia’s energy minister said the OPEC and other producers, gathered in Vienna, were close to a deal.

OPEC Agrees to Cut Output by 1.2 Million Barrels a Day (Bloomberg) OPEC reached an agreement to cut oil production by 1.2 million barrels to 32.5 million barrels a day at its ministerial meeting in Vienna, Bloomberg News reports, citing a delegate to the group.

Euro-Area Inflation Accelerates Before Key ECB Decision on QE (Bloomberg) Euro-area inflation accelerated in November, continuing its slow improvement before a crucial European Central Bank meeting next week. Consumer prices rose 0.6 percent from a year earlier, following a 0.5 percent increase in October, the European Union’s statistics office in Luxembourg said on Wednesday. Core inflation was unchanged at 0.8 percent in November. Both readings match the median estimate on Bloomberg surveys of economists.

Steel, Iron-Ore Prices Hammered by China Curbs (WSJ) Steel and iron-ore prices in China plunged on Wednesday after exchanges there lowered the daily trading limit and raised margin requirements in an effort to curb speculation. Shanghai steel-rebar futures for delivery in December pared some losses in late Asia trade to close 5.1% lower at 3,044 yuan ($441) a metric ton. Dalian iron-ore futures for delivery in January ended down 6.0% at 598 yuan a ton.

RBS fails Bank of England stress test (TheGuardian) Royal Bank of Scotland has emerged as the biggest failure in the Bank of England’s annual health check of the UK banking system. The bank, which is 73% owned by taxpayers, issued a plan on Wednesday to Threadneedle Street intended to bolster its financial strength by an estimated £2bn.

Sterling dips after best month vs euro since 2009 (Reuters) Sterling fell by half a percent against the dollar and euro in morning trade in London on Wednesday, with dealers citing month-end rebalancing by investors after its strongest performance against the single currency since early 2009.

Ottawa approves two pipelines, rejects one while imposing tanker ban on northern B.C. coast (Financial Post) Prime Minister Justin Trudeau announced approvals for two major export pipelines Tuesday, while dismissing a third pipeline and imposing a ban on oil tanker traffic on the northern section of B.C.’s coast. Prime Minister Justin Trudeau announced approvals for two major export pipelines Tuesday, while dismissing a third pipeline and imposing a ban on oil tanker traffic on the northern section of B.C.’s coast.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.562% at 124-13, S&P 500 futures are up 0.34% at 2211.25, Crude oil futures are up 7.87% at $48.79, Gold futures are down -0.41% at $1185.9, DXY is up 0.22% at 101.15, CAD/USD is down -0.33% 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

Tsys trading lower, yields 1-3 bps higher, US 10Y 2.35 after Q3 GDP came in better than exp at 3.2% – the strongest qtr in two yrs, with upward revisions to PCE & residential fixed invest. Crude taking another leg lower on less hope of a production cut at Wed meeting after Iran oil minister said country won’t cut production. Core Euro bonds mixed with long end UK gilts weighed by new long 2056 linker supply for £ 2.25bln, thou the order book was said to be in excess of £11bln. Tsys could see support in the next couple of days from m/e extension buying as well as talk of a huge sale imbalance from equities to fixed income according to GS.  In Canada, GOCs lower after 8:30 data, curve 1bp steeper with the 10Y 1.56% vs last Tuesday’s 1.62% intraday high. BOC Poloz speech highlighting the strength of Cdn service sector had little impact, he noted there is still considerable uncertainty. Provis unch, supply talk from QC (longs) & Ontario – both are already well spoken for.

News headlines  

U.S. stock futures slightly higher ahead of economic data (Reuters) U.S. stock index futures were slightly higher on Tuesday, a day after stocks posted their worst performance in nearly a month, with investors awaiting a raft of economic data including GDP numbers. Wall Street closed lower on Monday, dragged down by financial and consumer discretionary sectors, as some investors booked profits on the heels of a record-setting week.

Oil Retreats Below $47 Before OPEC Meeting as Rand Falls on Zuma (Bloomberg) Oil retreated back below $47 as OPEC members failed to bridge differences on production cuts, while a rally in metals ran out of steam. The rand plunged after President Jacob Zuma survived a leadership threat. Commodity and energy producers were the biggest decliners in the Stoxx Europe 600 Index. Crude slid as Iraq and Iran raised objections over the distribution of output reductions and Russia said it’s not planning to attend crucial talks with the Organization of Petroleum Exporting Countries on Wednesday. Copper slumped for the first time in seven days and the Bloomberg Dollar Spot Index ended a two-day loss.

Euro-Area Confidence Rises as ECB Reviews Asset-Purchase Program (Bloomberg) Euro-area economic confidence inched up ahead of a much-anticipated European Central Bank decision that will take place amid signs of brightening prospects for the 19-country region. An index of executive and consumer sentiment increased to 106.5 in November from a revised 106.4 in October, the European Commission in Brussels said on Tuesday. That compares with a forecast of 106.8 in a Bloomberg survey.

Services, not manufacturing or resources, driving economic recovery: Stephen Poloz (Financial Post) Stephen Poloz, the governor of the Bank of Canada, told a Toronto-based think-tank that services, and not manufacturing or resources, will drive Canada’s near term economic growth. Poloz spoke at a meeting of the C.D. Howe Institute in Toronto on Monday night. He said manufacturing and natural resources remain important parts of the Canadian economy, but it’s been 60 years since the number of Canadians employed in the goods sector surpassed those working in services.

‘A key test’: Canadian oil executives await Trudeau’s grand bargain on pipelines (Financial Post) Many in Canada’s business community will be watching if Prime Minister Justin Trudeau’s pipeline decisions, expected as early as Tuesday, deliver on his “grand bargain” — carbon pricing for pipeline approvals. “This is a key test of whether the Trudeau government is going to balance the needs of a resource-based economy with those of a climate agenda,” said John Manley, president and CEO of the Business Council of Canada.

Scotiabank profit climbs 9% to $2.01 billion, beating market expectations (Financial Post) Bank of Nova Scotia, Canada’s third-biggest lender, reported a better-than-expected rise in fourth-quarter earnings, driven by a strong performance from its domestic and international banking businesses. The bank is reporting $2.01 billion of net income for the three months ended Oct. 31, up from $1.84 billion a year earlier.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.1492% at 125-15, S&P 500 futures are up 0.02% at 2201.25, Crude oil futures are down -3.74% at $45.32, Gold futures are down -0.75% at $1184.8, DXY is up 0.13% at 101.46, CAD/USD is up 0.42% at 0.7426.

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 2-3 bps lower across the curve as oil prices remain under renewed pressure as likelihood off a deal to cut production at this Wednesday’s OPEC meeting remains uncertain, with Iran and Iraq proving difficult to persuade so far while Saudi doubts production cuts are even necessary. Core Euro bonds higher, flatter, yields 3-5bps lower also attributed to oil as well as buy stops on bund futures.  GOCs trading higher, outperforming tsys in the long end, curve 1bp flatter, GOC 10Y 1.54% (-2bps). Provis starting weaker, Ont 48s trading down at 95.5, keep an eye on Ont 46/26 roll heading into month end extension/cpn pmt, now 12.5bps , provi supply likely this week from Ont, NB & NF…

News headlines 

U.S. stock futures pull back after record-setting week (Reuters) U.S. stock index futures pulled back on Monday, after the three major indexes extended their post-election rally and closed at record highs. The three indexes closed higher for three weeks in a row, with the S&P 500 notching its seventh record close since Nov. 8. Oil prices were lower in choppy trading as the market grappled over the shaky prospect of OPEC producers being able to agree output cuts at a meeting on Wednesday aimed at reining in global oversupply.

Oil prices gyrate as OPEC heavyweights head to Vienna (Reuters) Oil prices edged higher on Monday, after falling as much as 2 percent in early trading, as the market grappled over the shaky prospect of major producers being able to agree output cuts at a meeting on Wednesday aimed at reining in global oversupply. Brent crude futures LCOc1 fell as far as 2 percent before clawing back to trade up 29 cents at $47.44 per barrel at 1008 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 also recouped early losses and were trading up 15 cents at $46.21 per barrel.

BOJ Has First Loss in Four Years on Hit From FX and Bonds (Bloomberg) The Bank of Japan had its first loss since Haruhiko Kuroda became governor after the value of foreign currency assets fell, it wrote down bond holdings and set aside more money to cover potential future losses on its holdings of government debt. The bank posted a net loss of 200.2 billion yen ($1.8 billion) in the six months through September, it said Monday.

OPEC Tries to Salvage Deal as Saudis Say Cut Isn’t Essential (Bloomberg) OPEC ministers flew to Moscow and officials in Vienna started another round of talks in an effort to salvage an agreement on production cuts, just as Saudi Arabia said a deal might not be necessary. With only two days to go before ministers from the Organization of Petroleum Exporting Countries try to finalize the first production decrease in eight years, the foundations for a deal are looking shaky.

Copper’s Scorching Rally May Hit Roadblock as Imports Drop (Bloomberg) Copper’s searing rally in November could hit a roadblock as China’s imports of the metal shrink. The world’s biggest consumer is making more copper domestically than ever before, using supplies of foreign ore concentrate, which is curbing demand for the refined metal. Overseas purchases of refined copper plunged to the lowest level in more than three years in October, contracting 45 percent from a year earlier, customs data showed Friday.

Brexit Impact Will Be Less Harsh Than Anticipated, OECD Says (Bloomberg) Brexit is going to cause the British economy to slow less than originally thought, according to the OECD. The Paris-based Organization for Economic Cooperation and Development revised up its U.K. growth forecasts to 2 percent from 1.8 percent this year, and to 1.2 percent from 1 percent in 2017, according to its November Economic Outlook. An inflation-induced pinch on consumer spending and lower investment are likely to drive the slowdown, it said, and those threats could prove more troublesome than expected.

Overnight markets      

Overview: US 10yr note futures are up 0.3245% at 125-20, S&P 500 futures are down -0.24% at 2206, Crude oil futures are up 1.24% at $46.63, Gold futures are up 0.77% at $1190.1, DXY is down -0.01% at 101.48, CAD/USD is down -0.69% at 0.7445.                                                                        

US Economic Data 

Canadian Economic Data

 There is no major economic data release 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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