Commentaires

Market Update

US  tsys trading much lower, the slide continuing for a 4th day following Trump’s election. The current 10Y at 2.24% is 9bps higher on the day & ~55bps higher since Wed morning. The USD surging to an 11-month high, core Euro bonds lagging the selloff in tsys – the bund/tsy 10Y spd new low 188bps. BOJ Kuroda sounding optimistic saying the economy is showing momentum and that inflation will hit 2% earlier than under any BOJ governor. In Canada, GOC yields are higher, yields 8-10 bps higher , the GOC 10Y 1.55%, a high since late April. Provis opening ~1bp tighter from Friday, supply unlikely given volatility in bond markets.

News headlines 

Bonds Bloodied as Trump Spending Plans Spur Dollar, Copper Gains (Bloomberg) Routs in global bonds and emerging markets intensified, while the dollar climbed with base metals as investors positioned for the wave of fiscal stimulus that Donald Trump has pledged to unleash. The yield on 30-year Treasuries rose above 3 percent for the first time since January, with last week’s record debt selloff bleeding into Monday trading and weighing on credit markets. The Bloomberg Dollar Spot Index advanced to the highest since February as the U.S. currency strengthened versus almost all its major counterparts. European shares pared earlier gains and stocks in developing nations sank to a four-month low. Copper headed for the highest close in 16-months and oil fell with gold.

Oil pinned near three-month lows as gloom grows over OPEC (Reuters) Oil fell to its lowest in three months on Monday, as the prospect of another year of oversupply and weak prices overshadowed chances that OPEC will reach a deal to cut output. Donald Trump’s surprise victory in last week’s U.S. presidential election has boosted stocks and the dollar, but undermined much of the commodities complex, including oil, which has sagged as expectations that the world’s largest exporters will agree to reduce output this month have waned.

In phone call, China’s Xi tells Trump cooperation is only choice (Reuters) Chinese President Xi Jinping told U.S. President-elect Donald Trump that cooperation was the only choice for relations between the world’s two largest economies, with Trump saying the two had established a « clear sense of mutual respect ». There has been intense speculation over the impact of Trump’s win on issues facing the two countries, from global trade and climate change to the security balance in the Asia-Pacific.

Trudeau Clears Path for Canada to Approve Kinder Morgan Pipeline (Bloomberg) Prime Minister Justin Trudeau has set the table for Canada to approve Kinder Morgan Inc.’s Trans Mountain pipeline expansion by announcing environmental measures aimed at placating opposition to the project. Trudeau unveiled a national carbon price in October, and over the past few weeks has pumped billions into marine protection and “green” infrastructure, as well as begun an overhaul of the federal energy regulator and granted crown protection to a rainforest that essentially blocks a rival proposal. He regularly says it’s his job to get Canada’s resources to market while balancing the environment and economy.

Former Amaya Inc CEO David Baazov offers to buy online gambling company for $3.48 billion (Financial Post) The former chief executive of Amaya Inc, David Baazov, has offered to buy the Canadian online gambling company in a deal valued at about $3.48 billion. The offer price of $24 per share represents a premium of 30.9 per cent to Amaya’s Friday close of $18.34.

Ottawa to make ‘unprecedented’ appeal for private investment in infrastructure (GlobeAndMail) Like a high-stakes episode of Dragons’ Den, Prime Minister Justin Trudeau and some of his senior cabinet ministers will spend the day behind closed doors at Toronto’s Shangri-La hotel, pitching investors on why they should park their billions in Canada.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.2457% at 126-28, S&P 500 futures are up 0.31% at 2168.25, Crude oil futures are down -1.59% at $42.72, Gold futures are down -0.13% at $1222.7, DXY is up 0.67% at 99.727, CAD/USD is up 0.04% at 0.7383.

US Economic Data 

There is no major economic data for today.

Canadian Economic Data 

There is no major 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Market Update

UK Gilts are trading mixed with 10-year part of the yield curve leading the underperformance weighed by continued concerns over a Donald Trump administration and the likely impact on growth and inflation in both the US and UK. UK construction output surprised to the upside, rising 0.3% in September, while Augusts number was revised up to -1.1% from -1.5%. This lead to construction falling 1.1$ in Q3, less than the 1.4% pencilled in for the preliminary GDP estimate, however the change will not have any impact on growth

News headlines 

 S&P 500 Futures Fall as Trump Policies in Focus; Apple Retreats (Bloomberg) U.S. stock-index futures fell, indicating the S&P 500 Index will halt a four-day winning streak, as investors continue to parse the implications of a Donald Trump presidency for the economy and interest rates. S&P 500 Index contracts expiring in December slid 0.6 percent to 2,154.25 at 6:35 a.m. in New York. The equity benchmark capped its longest winning streak since July yesterday, as financial companies extended gains, although progress was tempered by losses in technology and some defensive stocks. Bucking the trend, the Nasdaq 100 Index dropped the most since September.

Trump’s Transition Team Pledges to Dismantle Dodd-Frank Act (Bloomberg) President-elect Donald Trump is translating some of his populist campaign rhetoric into policy statements, including the contention that the Dodd-Frank Act should be scrapped because it has made Wall Street banks an even bigger threat to the nation’s economy and working families.

OPEC points to even bigger 2017 oil surplus as its output jumps (Reuters) OPEC reported an increase in its oil production in October to a record high led by members hoping to be exempt from the producer group’s attempt to curb supply, pointing to an even larger global surplus next year. The Organization of the Petroleum Exporting Countries pumped 33.64 million barrels per day (bpd) last month, according to figures OPEC collects from secondary sources, up 240,000 bpd from September, OPEC said in a monthly report.

Euro Heads for Worst Week in a Year on Increased Political Risks (Bloomberg) The euro headed for its worst week in a year as Donald Trump’s win in the U.S. presidential race stirred up investor concern over populist outcomes in European votes. Markets in the euro region potentially have turbulent period ahead with an Italian constitutional referendum in December and elections in France, Germany and the Netherlands next year that may kick out ruling parties or coalitions and overturn economic policies.

EU agrees to extend border controls inside Schengen zone (Reuters) The European Union agreed on Friday to extend temporary border controls inside the bloc’s free-travel zone for another three months to help cope with the migration crisis. Last month, the European Commission, which proposes legislation, recommended that Austria, Denmark, Germany, Sweden and non-EU Norway be allowed to continue carrying out border checks beyond Nov. 15, when the checks were due to end.

Alibaba Singles’ Day sales pass 2015 total, but growth rate slows (Reuters) Alibaba Group Holding Ltd’s (BABA.N) Singles’ Day sales surged past last year’s 91.2 billion yuan ($13.36 billion) total with nearly nine hours left on the clock, but growth was markedly slower than in 2015 as shoppers sought even bigger price cuts.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.2563% at 127-23, S&P 500 futures are up 0.43% at 2169.5, Crude oil futures are down -0.93% at $44.85, Gold futures are up 0.45% at $1279.2, DXY is up 0.34% at 98.843, CAD/USD is up 0.35% at 0.7423.

US Economic Data 

Canadian Economic Data 

There is no major 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, 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 begin NY lower after overnight mixed flows followed Wed. post-Trump-victory selloff on improved risk tone; US 10-year note 2.087%. TOKYO saw Asian central bank buying of 5s and 10s Tsys, along with Asian real$ buying 5s, 10s and 30s. Later, Japanese accts joined Asian real and fast$ accts buying 10s, 5s/30s flatteners in cash. Some anti-Trump protests spurred mild buying in TSys, with also other selling too. US swaps saw Asian bank receiving in 2’s/5’s swaps. Japan’s Nikkei stock index +6.7%Gilts/Bunds lower on risk-on momentum. Flow two-way in intermediates from foreign and domestic real$, leveraged acct payers in 10s, more flatteners and/or steepener unwinds from prop accts taking profits. Foreign central bank sales in 5s and under as well as 10s, asset manager sold 5s and 10s, fast$ bought 3a and 10s. But also foreign central bank buys in 10Y notes.

News headlines 

Stock futures rise day after Trump wins U.S. election (Reuters) U.S. stock index futures were higher on Thursday with Dow futures hitting a record high, a day after Republican Donald Trump won the White House race and signaled a shift from austerity policies. Investors are seeing Trump’s policies such as tax cuts, deregulation of banks and higher defense and infrastructure spending as being more business-friendly.

Treasuries Plunge Most in Four Decades as Trump Spurs Selloff (Bloomberg) Treasuries plunged, with 30-year bond yields climbing the most since at least 1977, amid concern that a Donald Trump administration and a Republican-led U.S. Congress will unleash a wave of spending to boost the U.S. economy, triggering a surge in inflation.

TransCanada Corp still ‘fully committed’ to Keystone XL, plans to engage with new president Trump (Financial Post) The controversial Keystone XL pipeline, all but dead under U.S. President Barack Obama, may find new life under President-elect Donald Trump. TransCanada Corp. said Wednesday it is considering how to pitch the newly elected president on the benefits of the proposed, and denied, pipeline that would give oilsands crude better access to U.S. markets.

Yuan Falls to Six-Year Low Amid Concern Trump Will Target China (Bloomberg) The yuan slipped to a six-year low as concern about China’s trade relationship with a more protectionist U.S. provided a new reason to sell the currency that’s heading for a third annual loss. The exchange rate fell 0.21 percent to 6.7923 per dollar at 5:13 p.m. in Shanghai, heading for its lowest closing level since September 2010, and extending its drop this year to 4.4 percent. China’s central bank barely weakened its yuan fixing even after a 1.4 percent surge by the Bloomberg Dollar Spot Index on Wednesday, helping the Asian currency rally against a basket of peers.

Canadians continue to pile up non-mortgage debt: report (GlobeAndMail) Canadians continued to pile up non-mortgage debt compared with a year ago but delinquency rates remained low, according to credit monitoring agency TransUnion. Average consumer non-mortgage debt balances rose to $21,686 at the end of the third quarter, up from $21,195 in the same quarter last year.

Manulife tops Q3 estimates as Asia operations grow 16.6% (BNN) Manulife Financial Corp (MFC.TO), Canada’s biggest life insurer, reported a better-than-expected quarterly profit, primarily driven by growth in Asia. Manulife has relied on Asian markets to fuel its growth in recent quarters while the insurer’s commodities-sector investments ate into its bottom line.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.2563% at 127-23, S&P 500 futures are up 0.43% at 2169.5, Crude oil futures are down -0.93% at $44.85, Gold futures are up 0.45% at $1279.2, DXY is up 0.34% at 98.843, CAD/USD is up 0.35% at 0.7423.

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