Commentaires

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

Market Update US tsys trading slightly lower, recouping earlier losses after very weak Durable goods (-4.4vs vs -2.6%), yields 0.5-1bp higher, with the 10Y 3.06%, heavy volume in TY futures (773k). Stocks rebounding, S&P futures +25, crude 54.70 (+2.4%). Busy day on the US eco front due to tomorrow’s holiday – Oct durable goods, existing home sales, LEI & $11bln 10Y TIPs auction. GOCs rising off the lows with tsys,10Y 2.35%.

News headlines

Strong Economy Gives Canada Room for Tax Breaks in Mini-Budget (Bloomberg) Recent turmoil in oil and financial markets aside, Canadian Finance Minister Bill Morneau’s budget update Wednesday will paint a rosy enough picture to finance tax breaks for corporations without fueling additional deficits. The federal government will probably revise revenue projections upward by at least C$7 billion ($5.5 billion) over three fiscal years beginning with the current one, according to Bloomberg calculations. That’s thanks to a better-than-expected economic outlook and signs of stronger tax collection, and excludes higher revenue from a new carbon tax on some provinces.

Goldman, JPMorgan Still Betting on Five Fed Hikes by End of 2019 (Bloomberg) Goldman Sachs Group Inc. and JPMorgan Chase & Co. are sticking with forecasts for the Federal Reserve to hike interest rates five more times by the end of 2019 even as financial markets shudder. In reports released in the past 24 hours as the Standard & Poor’s 500 index tumbled toward a correction, economists at the Wall Street giants predicted Chairman Jerome Powell and colleagues will raise their benchmark interest rate again in December, ultimately reaching 3.50 percent by the end of next year.

Kashkari Repeats View the Fed Should Take a Pause on Rate Hikes (Bloomberg) Federal Reserve Bank of Minneapolis President Neel Kashkari, who’s repeatedly called for caution on raising interest rates, said further tightening could trigger a recession. “One of my concerns is that if we preemptively raise interest rates, and it’s not in fact necessary, we might be the cause of ending the expansion” and triggering the next recession, Kashkari said in a National Public Radio interview posted online Tuesday. He said the Fed should “pause and see how the economy continues to evolve.”

U.S. Futures Gain With Europe Stocks; Dollar Drops: Markets Wrap (Bloomberg) U.S. stock futures climbed with European equities, trimming recent losses after the sharp declines across asset classes on Tuesday. Treasuries pared a drop and the dollar edged lower amid speculation the Federal Reserve may soften its policy stance. Contracts on the S&P 500, Dow and Nasdaq all pointed to a firmer open, while banks and telecommunications companies led an advance in the Stoxx Europe 600 Index. The previous session’s plunge in Apple Inc.’s stock hit suppliers in Asia earlier after all major U.S. benchmarks fell more than 1.5 percent Tuesday. The greenback edged lower after MNI reported the Fed is considering ending a cycle of interest rate hikes as early as the spring.

Bank of Canada to review policy framework, hints at big changes (Reuters) The Bank of Canada will review its monetary policies and is open to making major changes, including a move away from its long-standing practice of targeting inflation, a senior official said on Tuesday. The deadline for the review is late 2021, when the central bank is due to renew its five-year inflation control agreement with the federal government. The inflation target has been 2 percent for the last 23 years.

Bombardier to cut Belfast workforce by 490 (Reuters) Canada’s Bombardier Inc (BBDb.TO) plans to reduce its Belfast workforce by 490, the BBC reported on Wednesday citing union sources. The cuts are part of a previously announced plan to reduce its global workforce by 5,000.

The Daily Chase: Morneau to deliver fall fiscal update; OECD cuts global growth forecast (BNN) Finance Minister Bill Morneau delivers his Fall Economic Statement this afternoon. Three basic questions will frame our coverage: 1. Is Canada on a sustainable fiscal track? Recall the spring budget pegged the deficit for this fiscal year at $18.1 billion, with no line of sight to balance. Also recall the Liberals campaigned on a plan to balance the books in 2019.

 Overnight markets

Overview: US 10yr note futures are down -0.209% at 119-03, S&P 500 futures are up 0.91% at 2664, Crude oil futures are up 2.49% at $54.76, Gold futures are up 0.26% at $1224.4, DXY is down -0.25% at 96.594, CAD/USD is down -0.25% at 0.7534.

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