Commentaires

Market Update US tsy yields ~1-2.5 bps higher, equity futures higher (S&P fut +30), crude +1.8% 51.33. Risk on sentiment buoyed by narrowing in Italy/German bond spd, 10Y BTP -13bps @3.26%, FTSE MIB +2.5% on reports govt is studying lower deficit target after discussions with the EU. GOCs weaker, in line with tsys 10Y 2.36% – Cda/US spreads little changed after Friday’s CPI/retail sales data, with odds of a BOC rate hike at the January meeting hovering ~70%. Quiet on the data front until Friday with Q3 GDP expected to have risen 2.0%.

News headlines

Global Economy Heads Into Final Stretch With Diminished Momentum (Bloomberg) The global economy headed into the final stretch of 2018 in weakened shape, handing investors renewed reason to question how much central banks will be able to tighten monetary policy next year. Fresh data from the world’s third and fourth-largest economies on Monday added to the concern. A manufacturing gauge in Japan dropped to the lowest since early 2016, and business confidence in Germany fell for a third month.

U.K.’s Other Brexit Fight May Bar It From $1.7 Trillion WTO Deal (Bloomberg) U.K. businesses stand to lose access to a $1.7 trillion public procurement market if signatories to a World Trade Organization accord this week block Britain’s application for membership, which will lapse after it leaves the European Union in March. On Nov. 27, the U.K. will seek admission to the 46-nation Government Procurement Agreement in Geneva. Failure to rejoin the pact could prevent U.K. companies from bidding on government contracts in member nations, including the $837 billion U.S. market. Each member has the power to block admittance.

Ukraine Mulls Martial Law After Russia Flare-Up: Ukraine Update (Bloomberg) Ukraine’s parliament will vote on whether to impose martial law after Russia fired on its warships Sunday. Several sailors were wounded in the clash, which sparked the dramatic renewal of tensions between the ex-Soviet neighbors in the Kerch Strait, near Crimea, which President Vladimir Putin seized with his military four years ago. We’re following latest developments in real time. The time stamp is for Kiev.

Global Stocks Rebound With Oil; Italy Bonds Rally: Markets Wrap (Bloomberg) U.S. stock futures advanced alongside shares in Europe and Asia as investors looked more optimistically on the outlook for interest rates and trade in the wake of another miserable week in markets. Treasuries declined, while government bonds in Italy and Greece rallied. Banks and automakers led the Stoxx Europe 600 Index higher, with nearly all sectors in the green, after stocks rose in most of Asia except for China and Australia. The yen and dollar dipped as investors showed renewed appetite for risk. Italy’s bonds jumped as state officials began studying scenarios for a lower 2019 budget deficit target, while markets climbed in Greece after one of the nation’s banks revealed a plan to deal with troubled loans.

GM plans major announcement on global operations Monday (Reuters) General Motors Co (GM.N) is set to make a major announcement on Monday that will affect its global operations and threatens to shutdown a big vehicle assembly plant in the province of Ontario, a Canadian union said on Sunday. Unifor, which represents most unionized autoworkers in Canada, said it had been informed by GM that there would be no product allocated to the plant in Oshawa after December 2019, a development that would affect production at the plant. The union statement came after a Canadian TV news channel said GM was planning to close all operations at the plant in Oshawa, near Toronto.

Battered bitcoin miners may start shutting down (BNN) Bitcoin miners hit hard by the cryptocurrency’s crash may be throwing in the towel. The bitcoin network’s hash rate, one way of gauging the computing power dedicated to mining the digital currency, dropped about 24 per cent from an all-time high at the end of August through Nov. 24, according to Blockchain.com. While the decline may have partially resulted from miners switching to other cryptocurrencies, JPMorgan Chase & Co. says some in the industry are losing money after bitcoin’s price tumbled. “This suggests that prices have declined to a point where mining is becoming uneconomical for some,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a Nov. 23 report, in reference to the falling hash rate.

Bank of Canada expands balance sheet list to mortgage bonds (BNN) The Bank of Canada plans buy for the first time government-backed mortgage bonds in a bid to broaden the range of high-quality assets in its operations to manage its balance sheet. The move, which is part of a decision of including government-guaranteed debt issued by federal Crown corporations, will allow Ottawa-based central bank to offset continued growth in bank notes, the central bank said in an statement Friday. It will also give it flexibility to further reduce its participation in primary Canadian government bond auctions to help boost the tradeable float and support liquidity in the secondary market.

Overnight markets

Overview: US 10yr note futures are down -0.079% at 119-06, S&P 500 futures are up 1.14% at 2659.5, Crude oil futures are up 1.75% at $51.3, Gold futures are up 0.16% at $1225.1, DXY is down -0.11% at 96.805, CAD/USD is down -0.17% at 0.7567.

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, 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 Tsys trading higher, top of o/n range on above avg volume , 10Y 3.05% (-1.5bps). US stock futures are lower, Euro stocks mixed, while brent crude fell to the lowest level since 2017. GOCs outperforming tsys by 0.5-1bp despite Oct CPI rising to 2.4% y/y from 2.2% in Sep, even as the core rate was unch at 2.0%.

News headlines

Trump, Xi Signal Readiness for Trade Talks Ahead of G-20 Meeting (Bloomberg) U.S. President Donald Trump and Chinese leader Xi Jinping have indicated they’re both ready for a highly anticipated meeting at the Group of 20 summit in Argentina next week. The world’s biggest economies have been engaged in an escalating trade war that is starting to have a greater impact on financial markets and global growth. On Thursday, Trump told reporters that China wants to make a deal “very badly” after his administration placed tariffs on on about $200 billion worth of Chinese goods.

Oil Slumps Again to One-Year Low as Saudis Signal Record Output (Bloomberg) Oil slumped to the lowest in a year after Saudi Arabia signaled its output may have reached a record high and growing U.S. stockpiles stoked concerns over a potential supply glut. New York futures dropped 5.3 percent from their Wednesday settlement price in a trading session lengthened by the Thanksgiving holiday in the U.S., set for a seventh weekly decline. Traders are focused on the growing risks of a new glut of crude: Saudi Arabia’s oil minister said Thursday production from the world’s largest exporter climbed further this month after a surge in October, and U.S. stockpiles have risen for nine straight weeks.

Euro-Area Economy Puts Another Dent in ECB Hopes for Rebound (Bloomberg) The euro-area economy stumbled again this month, with a key indicator falling to the lowest in four years, denting expectations for an economic pickup after a summer slowdown. Adding to worries, the composite PMI from IHS Markit also showed that employment and orders growth slowed and companies’ expectations dropped. The euro, which plunged earlier after a weak reading in Germany, was down 0.3 percent against the dollar.

U.S. Stock Futures Drop; Copper Declines With Oil: Markets Wrap (Bloomberg) U.S. equity futures pointed to a weaker open and Asian benchmarks declined on Friday, while European stocks edged higher. Oil fell and headed for a seventh weekly loss on signs of oversupply, leading commodities lower. Contracts on the Dow, S&P and Nasdaq all pointed to markets reopening with a drop following the Thanksgiving holiday. Chinese Chinese equities led regional declines in Asia, with the technology sector weak on concern the U.S. is ratcheting up a campaign against Huawei Technologies Co. Meanwhile, banks and technology companies helped the Stoxx Europe 600 Index eke out a small advance. The dollar climbed and the euro reversed earlier gains as data showed Germany’s growth outlook weakened. The pound handed back much of Thursday’s gains after Spain said it may vote against the Brexit plan. Italian bonds led an advance in European debt markets.

Desperate to move crude, Alberta may buy trains alone if Canada balks (Reuters) Alberta is willing to buy trains itself to help clear a backlog of crude oil if Ottawa decides not to back the Canadian province’s proposal to split the costs of new rail cars, Premier Rachel Notley said on Thursday. Notley said Alberta had asked Prime Minister Justin Trudeau’s government to help pay for additional rail capacity to move an additional 120,000 to 140,000 barrels per day. Notley said Alberta had not received an answer from Ottawa.

Canada needs to do more to nurture its tech clusters, report says (BNN) Canada’s growing tech talent is drawing more investment to cities like Toronto and Montreal, but the country could lose momentum if it doesn’t do more to encourage industries to scale up, according to CBRE Ltd. The country lacks “tech clusters,” dense areas of activity that contain critical mass for companies and educational and research institutions, the Toronto-based brokerage said in a report Thursday. Tech clusters like those in San Francisco and Seattle have helped propel those cities to global success but Toronto is the only Canadian city competitive enough to rank among powerhouses in North America.

Trump says CIA didn’t conclude Saudi prince had role in Khashoggi murder (BNN) President Donald Trump disputed that U.S. intelligence officials have definitively concluded that Saudi’s crown prince ordered the murder of U.S.-based columnist Jamal Khashoggi, while continuing to tout the importance of maintaining economic ties with the Kingdom. A confidential Central Intelligence Agency report on Khashoggi’s death says Crown Prince Mohammed bin Salman “might have done it,” Trump said Thursday, referring to a demand that the journalist be killed. But the CIA “didn’t conclude” that the prince made the demand, the president told reporters during a press conference at his Mar-a-Lago resort in Florida. 

Overnight markets

Overview: US 10yr note futures are up 0.026% at 119-09, S&P 500 futures are down -0.37% at 2639.25, Crude oil futures are down -4.3% at $52.28, Gold futures are down -0.39% at $1223.2, DXY is up 0.09% at 96.796, CAD/USD is up 0.26% at 0.7561.

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, 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 Quiet day with the US closed for thanksgiving. In EGBs, UK gilts are trading lower following EU-UK draft agreement on Brexit, with the GBPEUR cross higher, 10Y gilt + 2bps @ 1.41%. German bunds outperforming along with peripherals, German 10Y 2bps lower, Italy 10Y BTP -4.5bps, bunds getting a boost from ECB minutes of Oct 24-25 meeting, which noted some weakening in latest eco data. In Canada, GOCs are slightly lower with light volumes expected due to US holiday. The Federal Govt outlined its fall economic statement yest, wich revealed a slightly lower budget deficit for this fy – $18.1bln vs $19bln last yr, even as tax revenues were $4.6bln higher than exp. Tax incentives for business worth $14bln over six years will add to deficits over the five yr horizon period. Provis unch from yest levels, Ont reopened its 2049 issue yesterday @ 82.5bps which steepened the Ont 48/28 box slightly (now 12.5bps). Ontario 10Y spd @ 70bps is the widest since June, 7bps wider since Nov 1st.

News headlines

Business Lauds Trudeau’s Tax Relief But Says More Could Be Done (Bloomberg) Justin Trudeau spent a windfall on billions in tax breaks for Canadian businesses. Their response is that he still has work to do. Finance Minister Bill Morneau unveiled a fiscal update Wednesday in Ottawa with C$14 billion ($10.5 billion) in temporary write-offs for capital investment, a pledge to slash red tape, some direct cash for businesses and a push to boost export markets. It was all meant as a bold response to warnings about Canada’s fading competitiveness, particularly after President Donald Trump cut U.S. corporate taxes.

Italy’s Weak Bond Sale Is Followed by Another Debt-Market Rally (Bloomberg) Institutional investors offered little reassurance to Italy’s leaders after a sale of inflation-linked bonds received the second-lowest orders on record. Orders for the issuance totaled 2.16 billion euros ($2.46 billion), well short of analysts’ estimates of as much as 8 billion euros ahead of the offering. Still, bonds traded in the secondary market rallied after Deputy Prime Minister Luigi Di Maio indicated that he sees room for dialogue on the nation’s budget plans that are in breach of the European Union’s spending rules.

ECB Waits for 2021 Projections While Noting Economic Fragilities (Bloomberg) European Central Bank officials acknowledged “uncertainties and fragilities” affecting the economy at their latest policy meeting, while agreeing that they weren’t enough to weaken confidence that the euro zone’s domestic strength will prevail. “It needed to be emphasized that the incoming data, while somewhat weaker than expected, remained overall consistent with with an ongoing broad-based expansion,” the ECB said in the record of its Oct. 24-25 policy meeting published Thursday. New forecasts in December — which will include an outlook for 2021 for the first — “would provide an occasion for a more in-depth assessment.”

Stocks Dip in Holiday-Thinned Trading; Pound Jumps: Markets Wrap (Bloomberg) European stocks declined on Thursday and U.S. equity futures edged lower in a subdued day of trading thanks to the American Thanksgiving holiday. The pound jumped and the euro strengthened after a draft deal on post-Brexit ties was tentatively agreed. The Stoxx Europe 600 Index gave up a chunk of Wednesday’s gains as almost every sector fell, though the intraday trading volume was below the 30-day average and the gauge came off its lows. Asian equity benchmarks swung between gains and losses before turning higher, with Japanese stocks getting an end-of-session boost on a report about a possible government rebate. Trading volumes in the region were also depressed.

Canada considering proposal to buy rail cars to move stranded crude (Reuters) The Canadian government is considering a request from Alberta to share the cost of buying rail cars to move an additional 120,000 barrels per day of crude oil from the nation’s oil-rich province, two sources with direct knowledge of the matter told Reuters. Under the terms of the proposal submitted by the Alberta government last week, the additional rail cars would be in service by October 2019 and would run until some time in 2022, the sources added.

China says U.S. accusations of unfair trade practices ‘groundless’ (Reuters) China rejected fresh U.S. accusations of perpetuating “unfair” trade practices and urged Washington on Thursday to stop making provocations, showing little sign of backing down days ahead a high-stakes meeting between leaders from both countries.

Canada is less attractive than West Africa, U.K., warns Canadian Natural’s vice-chair (BNN) Canadian Natural Resources’ executive vice-chairman is hinting his company is gearing up to deploy its financial heft beyond Canada’s borders as record-low oil prices and competitiveness concerns plague the country’s energy sector. “We’re basically in Canada, the U.K. and offshore west Africa. I will say that we’re doing our budget right now and clearly the U.K. and offshore Africa look much better than Canada for investments,” Steve Laut told BNN Bloomberg in an interview Tuesday. “We’re still working it out, but they look much better.”

Republican Senators tell Trump they want vote on USMCA this year (BNN) A dozen GOP Senators urged President Donald Trump to send lawmakers final legislative language for a U.S.-Canada-Mexico trade agreement as soon as possible so that it can pass before Democrats take control of the House next year. The lawmakers wrote in a Nov. 20 letter that they’re concerned that waiting until 2019 to send Congress draft legislative language will make passage “significantly more difficult,” as some Democrats have called for revisions. Senate Majority Leader Mitch McConnell of Kentucky so far hasn’t shown interest in considering the trade deal before the end of the year. 

Overnight markets

Overview: US 10yr note futures are down -0.039% at 119-06, S&P 500 futures are down -0.27% at 2641.75, Crude oil futures are down -0.11% at $54.57, Gold futures are up 0.08% at $1229, DXY is down -0.22% at 96.502, CAD/USD is down -0.08% at 0.7564.

US Economic Data

There is no US economic data for today

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