Commentaires

Market Update

US tsys trading weaker, curve steeper, 10Y 2.89% (+1.3bps), avg volume in TY futures (343k), equity futures higher (S&P +22), European equities rising for a second day, Euro Stoxx +1.5%.  Core EGBS lower, bunds pressured in the last hr as BTPs rally on news Italian govt has agreed on new fiscal budget before meetings in Brussels today, while in the UK 10Y gilts ~3bps higher as PM May faces a non-confidence vote on Brexit, thou she is widely expected to survive. ECB meeting tomorrow – ECB expected to announce an end to asset purchases despite signs of weaker economy, Brexit upheaval… In  Canada, GOCs slightly lower in line with tsys, 10Y 2.09% – 4bps off Mondays 2.05% one-year low. Povis widening yest on supply – long Sask 2050 @ 96.5 (ont +4).

News headlines

Theresa May Faces Confidence Vote Today on Her Leadership (Bloomberg) Theresa May will face a vote of confidence in her leadership of the Conservative Party as the embattled U.K. prime minister warned the rebels who want her out that they will be putting Brexit at risk.

Huawei CFO Gains Bail in Canada as U.S. Seeks Extradition (Bloomberg) Huawei Technologies Co. Chief Financial Officer Meng Wanzhou was granted bail by a Canadian court, allowing the executive to stay in her Vancouver home as she awaits a possible extradition to the U.S. over fraud charges. Justice William Ehrcke of the British Columbia Supreme Court agreed to release Meng on the condition she post bail of C$10 million ($7.5 million), including at least C$7 million in cash, and submit five people who would act as “sureties” — guarantors to ensure she complies with the bail terms who would lose the cash or other assets they put up if she were to flee.

Trump Says He Would Intervene in Huawei Case to Get China Deal (Bloomberg) President Donald Trump said he would intervene in U.S. efforts to extradite Huawei Technologies Co. executive Meng Wanzhou if it helped him win a trade deal with China. “If I think it’s good for what will be certainly the largest trade deal ever made, which is a very important thing — what’s good for national security — I would certainly intervene, if I thought it was necessary,” Trump said Tuesday in an interview with Reuters.

Stocks Rally on Renewed Trade Hopes; Pound Climbs: Markets Wrap (Bloomberg) Stocks rallied globally as the outlook for U.S.-China trade took a positive turn. The pound strengthened as the British prime minister vowed to fight a challenge to her leadership. U.S. equity futures and European shares climbed following big gains in Asia after the chief financial officer of Huawei Technologies Co. was granted bail and President Donald Trump said he’d consider intervening in the case if it helps get a trade deal with China. In the U.K., markets took news that Theresa May will face a vote of confidence from the Conservative Party she leads in stride. Sterling gained as several ministers rushed to back her and she vowed to contest the vote “with everything I’ve got.”

Amazon aims at office workers with compact cashier-less food store (Reuters) Amazon.com Inc on Wednesday opened a compact version of its cashier-less Amazon Go food stores, broadening its footprint in the bricks-and-mortar world in a move to add shops in places such as office lobbies and hospitals. Located in one of the company’s Seattle offices, the eighth Amazon Go store is near the original and a quarter the size, at a mere 450 square feet. That is about the size of a New York City studio apartment. The new store is aimed at selling salads and snacks to office workers.

Ex-diplomat Kovrig who led Trudeau’s Hong Kong visit detained in China (BNN) China has detained a former Canadian diplomat in Beijing in apparent retaliation for the jailing of a top Chinese executive at the request of the United States, escalating a legal and diplomatic wrangle between the three countries. Relations were shaken by Canada’s arrest of Meng Wanzhou, chief financial officer of Chinese telecommunications giant Huawei and daughter of its founder. Canadian authorities detained Meng on Dec. 1 during a layover at the Vancouver airport. The U.S. accuses Huawei of violating American economic sanctions against Iran.

Modest home price growth expected for 2019: Re/Max, Royal LePage (BNN) Home prices across the country are expected to rise in 2019, but only at a moderate pace compared with recent years, according to two of Canada’s largest residential real estate brokerages. Royal LePage is anticipating the national median home price will increase by 1.2 per cent in 2019, with prices in Toronto and the surrounding areas expected to rise 1.3 per cent to $854,552. Home prices in Greater Vancouver are forecast to go up by just 0.6 per cent to $1.29 million, while home prices in Montreal and the nearby region are expected to see the largest rise out of Canada’s biggest cities, with home prices anticipated to jump three per cent to $421,306 in 2019.

Overnight markets

Overview: US 10yr note futures are down -0.052% at 120-12, S&P 500 futures are up 0.91% at 2665.25, Crude oil futures are up 1.8% at $52.58, Gold futures are up 0.21% at $1249.8, DXY is down -0.1% at 97.294, CAD/USD is down -0.17% at 0.7481.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	2.052%	2 Year	2.768%
5 Year	2.046%	5 Year	2.751%
10 Year	2.095%	10 Year	2.892%
30 Year	2.241%	30 Year	3.143%

US Economic Data

7:00 AM	MBA Mortgage Applications, Dec 7th 1.6% (2.0% prior)
8:30 AM	CPI MoM, Nov est 0.0% (0.3% prior)
	CPI Ex Food and Energy MoM, Nov est 0.2% (0.2% prior)
	CPI YoY, Nov est 2.2% (2.5% prior)
	CPI Ex Food and Energy YoY, Nov est 2.2% (2.1% prior)
	CPI Index NSA, Nov est 252.006 (252.885 prior)
	CPI Core Index SA, Nov est 259.412 (258.939 prior)
	Real Avg Weekly Earnings YoY, Nov (0.9% prior)
	Real Avg Hourly Earnings YoY, Nov (0.7% prior)
14:00 PM	Monthly Budget Statement, Nov est -199.0b (-100.5b prior)

Canadian Economic Data

8:30 AM	Teranet/National Bank HP Index, Nov (225.30 prior)
	Teranet/National Bank HPI MoM, Nov (-0.4% prior)
	Teranet/National Bank HPI YoY, Nov (2.8% prior)
	Capacity Utilization Rate, 3Q est 86.0% (85.5% prior)

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, Hugues Savard

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 weaker with equity futures higher (S&P +20, Nasdaq +67), US 10Y 2.88% (+2bps). Positive news on trade as China considering cutting tariffs on US made cars. Little reaction to stronger PPI data in the US –  with the core +0.3% vs 0.1% exp – the BLS noting that services prices were boosted by higher margins at fuel retailers.  Core Euro bonds also lower, Gilts underperforming as UK PM May set to meet EU Juncker to discuss possible changes to current Brexit deal. GOCs lower, in line with tsys, 10Y 2.07% (+1bp). Provis ended yest unch after widening at first, as equities rebounded in the after.

News headlines

Huawei Judge Debates Apt Bail for Chinese Billionaire’s Daughter (Bloomberg) A Canadian judge said Monday he wasn’t satisfied with a bail proposal from the lawyers for jailed Huawei Technologies Co. Chief Financial Officer Meng Wanzhou, who faces a U.S. extradition request. Justice William Ehrcke of the British Columbia Supreme Court voiced doubts that Meng’s husband, Liu Xiaozong, could act as her « surety » — that is, a type of guarantor or “community jailer » who would be responsible for ensuring she meets bail terms and who would lose a proposed C$15 million in cash and properties if she were to violate conditions.

Cohen Said Russian Vowed ‘Political Synergy’ for Trump in 2015 (Bloomberg) Michael Cohen spoke with a Russian national who repeatedly proposed a meeting between Donald Trump and Russian President Vladimir Putin in the early months of Trump’s presidential bid, and offered “political synergy” for the campaign, according to a filing by Special Counsel Robert Mueller’s office. Trump tweeted early Saturday that there had been “NO COLLUSION!”

China Moves on U.S. Car Tariff Cut Trump Tweeted About (Bloomberg) China is moving toward cutting its trade-war tariffs on imported U.S.-made cars, a step already brandished by President Donald Trump as a concession won during trade talks in Argentina. A proposal to reduce tariffs on cars made in the U.S. to 15 percent from the current 40 percent has been submitted to China’s Cabinet to be reviewed in the coming days, according to people familiar with the matter. Shares of carmakers including BMW AG, Ford Motor Co. and Tesla Inc. rose on the news.

U.S. Futures, European Stocks Rally as Bonds Drop: Markets Wrap (Bloomberg) U.S. equity futures and European stocks rallied while Asian shares slipped as investors weighed the prospects for success in American-Chinese trade talks. The pound rebounded. Futures on the Dow Jones, S&P 500 and Nasdaq indexes all jumped, shrugging off losses in the Asian benchmark after China was said to move toward cutting tariffs on American-manufactured cars. Miners and carmakers advanced, helping the Stoxx Europe 600 Index extend gains. The pound rallied, trimming some of its tumble from a day earlier. The dollar weakened while Treasuries and European sovereign bonds fell.

Court rejects Nissan ex-chairman Ghosn’s appeal to end detention (Reuters) A Tokyo court on Tuesday rejected ousted Nissan Motor chairman Carlos Ghosn’s appeal to end his detention following his arrest last month on allegations of financial misconduct. Ghosn has been held in a Tokyo jail since he was arrested on Nov. 19 on suspicion of conspiring to understate his pay by about half of the actual 10 billion yen ($88 million) awarded over five years from 2010. He was officially charged on Monday.

Hyundai Motor’s two R&D vice chairmen offer to resign (Reuters) Hyundai Motor Group’s two vice chairmen in charge of research and development (R&D) have offered to resign, three people familiar with the matter told Reuters on Tuesday. R&D president Albert Biermann is likely to be named the new head of the division, two of them added, declining to be named as they are not authorized to speak to media. Hyundai is battling a plunge in sales, profits and its share price, and the reshuffle would be the latest since it promoted Euisun Chung in September to executive vice chairman, moving him closer to succeeding his octogenarian father as head of South Korea’s second-largest group.

Huawei fallout hits Canada Goose shares while China rival soars (BNN) Escalating tensions between China and Canada triggered by the arrest of Huawei Technologies Co.’s finance chief is having a dramatic impact on two of the world’s hottest apparel stocks. Canada Goose Holdings Inc. (), the trendy maker of premium parkas, has tumbled almost 20 per cent over the past four days. At the same time, Bosideng International Holdings Ltd., a Hong Kong-based downy apparel maker, has jumped nearly 13 per cent to a five-year high.

Overnight markets

Overview: US 10yr note futures are down -0.22% at 120-13, S&P 500 futures are up 0.86% at 2665.75, Crude oil futures are up 1.16% at $51.59, Gold futures are up 0.17% at $1251.5, DXY is down -0.23% at 96.998, CAD/USD is down -0.13% at 0.7474.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	2.036%	2 Year	2.752%
5 Year	2.037%	5 Year	2.746%
10 Year	2.087%	10 Year	2.886%
30 Year	2.237%	30 Year	3.145%

US Economic Data

6:00 AM	NFIB Small Business Optimism, Nov 104.8 est 107.0 (107.4 prior)
8:30 AM	PPI Final Demand MoM, Nov est 0.0% (0.6% prior)
	PPI Ex Food and Energy MoM, Nov est 0.1% (0.5% prior)
	PPI Ex Food, Energy, Trade MoM, Nov est 0.2% (0.2% prior)
	PPI Final Demand YoY, Nov est 2.5% (2.9% prior)
	PPI Ex Food and Energy YoY, Nov est 2.5% (2.6% prior)
	PPI Ex Food, Energy, Trade YoY, Nov (2.8% prior)

Canadian Economic Data

There is no Canadian 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, Hugues Savard

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 slightly lower, US 10Y 2.86%, yield curve flatter, paring gains as equities rebound from losses – S&P futures +2.75 (were down 20 early). Core Euro bonds mixed – UK gilts higher, yields 3-5bps lower with  the GBP at 18 month lows ad it appears PM May will delay tomorrow’s crucial Brexit vote for fear of defeat. German bunds sold off at the open as equities moved higher, despite muted EGB issuance this week. Focus in the US on Wed CPI & Friday retail sales. In Canada, GOCs slightly higher, outperforming tsys by 1bp with GOC curve flatter after Friday’s huge Nov Payrolls which saw the largest one month gain on record at 94k vs 10k exp, with odds of a Jan hike rising to 17% from 8% prior to the report.

News headlines

China Says Canada Violated Bilateral Agreement in Huawei Arrest (Bloomberg) China accused Canada of violating a bilateral agreement by failing to speedily inform its consulate of the arrest of Huawei Technologies Co. Chief Financial Officer Meng Wanzhou, as tensions between the nations continue to escalate. “According to the China-Canada consular agreement, if a Chinese citizen is arrested by the Canadian government, the Canadian government should immediately notify the Chinese embassy,” Chinese Foreign Ministry spokesman Lu Kang told reporters in Beijing on Monday. “But the Canadian government didn’t do that.”

U.K. Economy Loses Steam as Battle Over Brexit Rages (Bloomberg) The U.K. economy lost momentum in the three months through October, a further sign of the toll being taken by Brexit uncertainty. Growth slowed to 0.4 percent from 0.6 percent in the third quarter, the Office for National Statistics said Monday. In October alone, growth was just 0.1 percent, with the economy being spared a third month of stagnation by a rebound in the dominant services industry.

ECB Heads for Crunch Time After Weeks of Holding Its Nerve (Bloomberg) European Central Bank officials have gone silent on monetary policy after weeks of holding their nerve in the face of waning confidence, slowing growth and mounting economic risks. The Governing Council is just days out from its Dec. 13 meeting, when it will probably call time on one of its major crisis tools. The buildup to the end of net asset purchases after spending 2.6 trillion euros ($3 trillion) has been anything but smooth, with multiple indicators falling and two of the euro area’s biggest economies – Germany and Italy – contracting.

Stocks Drop as Trade Concerns Fester; Pound Falls: Markets Wrap (Bloomberg) U.S. equity futures declined and European stocks followed Asian shares lower as traders fret over the outlook for global growth and a potential escalation of tensions between Washington and Beijing. The pound weakened as Theresa May was said to delay a crucial parliamentary vote on Brexit. Chemical companies led the retreat in the Stoxx Europe 600 Index as contracts on the Dow Jones, Nasdaq and S&P 500 indexes all languished in the red. The glum mood follows weak economic data out of China and news the country’s vice foreign minister summoned the U.S. ambassador to protest the arrest of Huawei Technologies Co.’s CFO. The euro strengthened on upbeat German trade data, while the dollar drifted. Treasuries and European sovereign bonds were mixed.

China urges Canada to free Huawei CFO or face consequences (Reuters) China warned Canada on Saturday that there would be severe consequences if it did not immediately release Huawei Technologies Co Ltd’s [HWT.UL] chief financial officer, calling the case “extremely nasty”. Meng Wanzhou, Huawei’s global chief financial officer, was arrested in Canada on Dec. 1 and faces extradition to the United States, which alleges that she covered up her company’s links to a firm that tried to sell equipment to Iran despite sanctions.

Shoppers Drug Mart granted licence to sell medical marijuana online (BNN) Shoppers Drug Mart has been granted a licence to sell medical marijuana online. Health Canada’s list of authorized cannabis sellers and producers has been updated to reflect that the pharmacy can sell dried and fresh cannabis, as well as plants, seeds and oil. A website has been set up by the company, which says that patients « with a valid medical document will soon be able to purchase a wide selection of medical cannabis products » from Shoppers. A spokeswoman for Shoppers’ parent company Loblaw Companies Ltd. says it’s too soon to say when people will be able to start making orders.

Consumer insolvencies climb 9% in Canada amid higher rates (BNN) Insolvencies filed by Canadian consumers jumped by the most in two years amid signs recent interest rate increases are filtering through to the economy. Insolvencies climbed to 11,641 in October, an increase of 9.2 per cent from a year earlier, according to a report from the Office of the Superintendent of Bankruptcy Canada. Insolvencies surged 16 per cent from September, and are 1.5 per cent higher than 2017 on a year-to-date basis. The Bank of Canada has raised borrowing costs five times since July 2017, and Governor Stephen Poloz reiterated Thursday rates will need to rise “into a neutral range” somewhere around 2.5 per cent to 3.5 per cent, from the current 1.75 per cent, as the economy operates near capacity. That view was reinforced by data Friday that show the country posted a record employment gain in November.

Overnight markets

Overview: US 10yr note futures are down -0.039% at 120-22, S&P 500 futures are up 0.01% at 2636.25, Crude oil futures are down -1.39% at $51.88, Gold futures are down -0.01% at $1252.5, DXY is up 0.14% at 96.649, CAD/USD is down -0.12% at 0.7515.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	2.006%	2 Year	2.719%
5 Year	2.008%	5 Year	2.701%
10 Year	2.074%	10 Year	2.854%
30 Year	2.235%	30 Year	3.134%

US Economic Data

10:00 AM

JOLTS Job Opening, Oct est 7100 (7009 prior)

Canadian Economic Data

8:15 AM	Housing Starts, Nov est 198.0k (205.9k prior)
8:30 AM	Building Permits MoM, Oct est -0.3% (0.4% prior)
10:00 AM	Bloomberg Nanos Confidence, Dec 7th (53.6 prior)

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, Hugues Savard

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