Commentaires

Market Update

US Treasuries opened Fri NY weaker after Thurs holiday, Wed NY decline; 10Y note now 2.381% vs. 2.357% Wed 3pm ET. TOKYO saw decent Tsys volume: Asian-real money and commercial banks sellers of 5Ys, Asian real-money buying of 10’s as well as selling away, Asian bank portfolio buying of 7Y, 10Y and 10’s and credit desk selling of 30Ys. US swaps saw paying in 5s from Asian bank ALM desks and exotic payers of 10’s/30’s steepeners, Asian real-money receiving in the belly as well as asset swap buying. Asia real$ bought Tsys, trailing improved EGB levels, mild risk-off sentiment into the weekend, stops triggered/technical buying as Dec Bund 10Y futures broke above 161.40 (Nov 24 high). Ongoing heavy roll volume in Dec to Mar Tsys across the curve, March takes top step next Wednesday.

News headlines 

U.S. stock futures rise; focus on retail as Black Friday kicks off (Reuters) U.S. stock index futures were higher on Black Friday, with the focus on retailers to see if they will propel or hit pause on Wall Street’s record-setting rally. Trading is expected to be relatively quiet with the U.S. stock market scheduled to close at 1:00 p.m. ET. The market was shut on Thursday for the Thanksgiving holiday.

Gold Recovers From Nine-Month Low as Dollar’s Rally Fizzles (Bloomberg) Gold pared a third weekly drop as the dollar halted a rally that sent bullion prices to a nine-month low and pushed silver into a bear market. Bullion’s first gain in four days cut this week’s loss to 1.5 percent. Prices have tumbled as strong economic data and the prospect of more spending after Donald Trump’s U.S. election win boosted bets for higher interest rates. Investors are selling out of gold-backed funds at the fastest pace in three years.

U.K. Economy Shows No Sign of Brexit Effect as Spending Rises (Bloomberg) Consumers and businesses increased their spending in the third quarter as the U.K. economy registered a resilient performance following the Brexit vote. Household spending rose 0.7 percent from the second quarter and business investment increased 0.9 percent, the Office for National Statistics said on Friday. Growth overall was unrevised at 0.5 percent, with trade providing the strongest contribution. A separate report from the Confederation of British Industry showed retail sales grew at their fastest annual pace in more than a year in November.

For OPEC’s Rivals, Success Lies in Oil Market Far, Far Away (Bloomberg) Rivals of OPEC seeking to reach its most-prized oil customers are finding that the long way around is better than any shortcut to success. As the group seeks to implement a deal to limit output, the glut that was exacerbated by its prior strategy of keeping taps open has spawned a market structure that’s benefiting competitors in sales to Asia. Cargoes from Europe’s North Sea will reach South Korea in coming months, while U.S. Eagle Ford shale crude as well as Mexican oil arrived at Yeosu port in November. Japanese and Thai refiners have bought West Texas Intermediate from BP Plc.

China’s October coal imports from North Korea up on month after falling in September (Reuters) China’s coal imports from North Korea rose in October after falling more than a quarter in September from the previous month amid a push from the United States to punish North Korea for its recent nuclear test. Coal imports from North Korea climbed 1.22 percent in October to 1.82 million tonnes compared with September, data from China’s General Administration of Customs showed on Friday.

Japan economic indicators seen steady but slow in October: Reuters poll (Reuters) Japan’s industrial output was expected to show little change in October, a Reuters poll found, suggesting uninspiring domestic and external demand hampered a steady recovery in production. Industrial production was seen likely to slip 0.1 percent in October from the previous month, the Reuters poll of 20 analysts showed, after a 0.6 percent rise in September and a 1.3 percent growth in August.

Overnight markets 

Overview: US 10yr note futures are down -0.1122% at 125-7, S&P 500 futures are up 0.23% at 2205.75, Crude oil futures are down -1.11% at $47.43, Gold futures are down -0.29% at $1189, DXY is down -0.21% at 101.49, CAD/USD is down -0.03% at 0.7414.

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

Market Update

US cash mkt closed, TY futures lower on very low vol (135k). UK gilt/bund curves steeper, as mkt adjusts to much larger than exp borrowing program, even as the 15bln increase is weighed more towards the short end. Bunds also mixed, buoyed by as exp Q3 German GDP (0.2%) and weaker IFO expectations index. Bunds faded from highs after ECB VP Costancio said it was difficult to anticipate results of Italy referendum, and that he was encouraged by better data on inflation & growth. GOCs lower, erasing half of yest rally, GOC 10Y 1.59 from 1.61 high yest morn. Long benchmark change – Dec 48s with the 48/45 roll -2/-2.2 – inverting further from yest pre-auction. Provis unch, Ont 26s traded down 83.5 yest aft, opening 83.5/83. In corps weve seen some extension trades & buying in high beta reits,NVCC … a couple of observations: TAP 23s look cheap and have lagged the broader mkt, Morguard (MRCCN) offers decent spread off more liquid reits, NVCC looks attractive on variety of metrics (lack of supply, spread over DN). Teranet, cominar, telus also names weve traded recently.

News headlines 

Dollar Surge Weighs on Emerging Markets as Copper Extends Rally (Bloomberg) The dollar gains reverberated through emerging markets as the case for multiple U.S. rate hikes next year strengthened. Copper was set to close at its highest level in more than a year. India’s rupee and Vietnam’s dong slid to records, while the Philippine peso dropped to its weakest level in eight years. In Turkey, the lira rebounded from an all-time low after the central bank unexpectedly raised interest rates. Copper’s surge pulled a gauge of commodities higher for a fourth day, the longest rally in a month. Rosneft PJSC approved a $17 billion bond program, the biggest ever by a Russian company as the nation’s largest oil producer refinances debt.

Gold Sets 9-Month Low After Silver Enters Bear Market on Dollar (Bloomberg) Gold is getting trampled, and silver entered a bear market. Bullion sank to the lowest level since February on speculation that prospects for economy-boosting policies by U.S. President-elect Donald Trump will lead the Federal Reserve to raise interest rates. The dollar reached the highest level in more than a decade and U.S. equities hit new records. Silver fell for a second day after closing more than 20 percent below the Aug. 2 settlement.

Oil prices static on uncertainty over planned production cut (Reuters) Oil prices were little changed on Thursday as uncertainty ahead of a planned OPEC-led crude production cut and thin liquidity during the U.S. Thanksgiving holiday kept traders from making big new bets. At 1040 GMT (5:40 a.m. ET), Brent crude futures LCOc1 were trading at $48.89, down 6 cents from their close. U.S. West Texas Intermediate (WTI) crude CLc1 was down 2 cents at $47.94 per barrel.

Fed policymakers confident of need for rate hikes on eve of Trump win (Reuters) Federal Reserve policymakers appeared confident on the eve of the U.S. presidential election that the economy was strengthening enough to warrant interest rate increases soon, minutes from the Fed’s Nov. 1-2 meeting showed. The minutes released on Wednesday back the consensus view on Wall Street that the Fed is poised to raise rates in December. Policymakers left borrowing costs unchanged earlier this month, just days before Republican Donald Trump triumphed in the Nov. 8 presidential contest.

China says it will promote trade deals regardless of TPP, RCEP direction (Reuters) China said it will actively participate in bilateral and multilateral trade deals, with the goal of deepening reform and opening up its economy, regardless of the direction the Trans Pacific Partnership (TPP) or the China-backed Regional Comprehensive Economic Partnership (RCEP) might take. The statement follows U.S. President-elect Donald Trump saying he would withdraw the United States from the multi-country TPP that excludes China, putting RCEP – a rival pact that excludes the United States – as the front-runner for new free trade deals in the region.

IEA expects oil investment to fall for third year in 2017 (Reuters) Investment in new oil production is likely to fall for a third year in 2017 as a global supply glut persists, stoking volatility in crude markets, the head of the International Energy Agency (IEA) said on Thursday. « Our analysis shows we are entering a period of greater oil price volatility (partly) as a result of three years in a row of global oil investments in decline: in 2015, 2016 and most likely 2017, » IEA director general Fatih Birol said, speaking at an energy conference in Tokyo.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.1745% at 125-5, S&P 500 futures are up 0.05% at 2201.75, Crude oil futures are down -0.02% at $47.95, Gold futures are down -0.39% at $1187.8, DXY is up 0.07% at 101.77, CAD/USD is up 0.05% at 0.7411.

US Economic Data 

There is no major economic data release for today

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