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Colin Cieszynski

The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.

Traders around the world have their eyes on Vienna waiting for details on the results of today's production negotiations between OPEC and non-OPEC countries. Comments following morning talks have been optimistic. Reports have tossed around all kinds of numbers this morning, including:

-- The total cut could rise to 1.4 million barrels a day (mmbbld) up from the 1.2 mmbbld cut agreed to in September;

-- OPEC could cap is production at 32.5 million barrels a day, about a 1 mmbbld cut;

-- Non OPEC producers could cut up to 0.6 mmbbld;

-- Russia has been rumoured to be prepared to cut 0.4 mmbbld up from freeze-only expectations but Russia has since called that number "a bit excessive;"

-- Iran and Iraq remain sticking points. Apparently Iraq is willing to cut;

-- Iran doesn't want to cut production although there are reports some kind of alternate arrangement may be made to bring Iran on board.

So far traders have taken these reports as positive sending oil prices screaming over 8 per cent upward with Brent taking a run at $50 (U.S.) and WTI up from $45 toward $48.

In premarket trading, Exxon Mobil's shares rose 1.8 per cent, while Chevron and Schlumberger were up more than 2.3 per cent.

It looks encouraging overall but traders should note that negotiations continue, nothing is final and a lot can change. How a final arrangement (or lack of one) differs from current expectations could still drive big trading swings today in either direction not only in oil prices but also in oil sensitive markets including currencies like the Canadian dollar, which is up nearly half a cent (U.S.) on the news, the Norwegian krone, the ruble, and Mexican peso, plus energy stocks.  Energy sector trading could impact swings in the FTSE and Toronto's S&P/TSX composite.

In other news, US index futures and the Dax are trading up 0.2 per cent or more today. The FTSE's higher weighting in energy stocks has propelled it to a 1 per cent gain so far.

In currency action today, oil currencies are dominating with the ruble up 2.1 per cent, the krone up 0.75 per cent and CAD up 0.5 per cent.

The loonie may also be impacted by today's Canadian GDP report. The Canadian economy slightly exceeded expectations in the third quarter as it grew at an annual pace of 3.5 per cent. strong numbers for Strong energy exports helped the country's real gross domestic product bounce back from a second-quarter contraction, Statistics Canada said.

The Bank of Canada has been hoping for a summer bounce in the Canadian economy. This may ease pressure the Bank of Canada is under to cut interest rates next week. The Street was expecting to see 1.8 per cent growth for September and 3.4 per cent growth for the quarter up from a 1.6-per-cent decline in the second quarter. Bank of Canada Governor Stephen Poloz indicated earlier this week that an upturn in the service sector may be a key driver of growth in Canada going forward.

It's potentially a big day for trading in Canada. On top of the oil price action and key GDP figures, another round of bank earnings are out today. Yesterday's big beat by the Bank of Nova Scotia was offset by a big miss at the Royal Bank of Canada today so the banking sector could be active. U.K. banks are also active on the publication of U.K. stress test results which Royal Bank of Scotland failed and Barclay's had a capital deficiency in one area.

Today is also a big day for U.S. economic news with ADP payrolls and Chicago PMI providing an initial indication of how the U.S. economy is performing following the election and a preview of the national PMI and nonfarm payrolls numbers due later in the week.

ADP payrolls came in at 216,000 way above Street estimates of 170,000. However, the previous month was  revised down to 119,000 from 147,000.

This suggests there was a slowdown in hiring before the election and a big rebound after. This news keeps the Fed on track for a December rate hike and more rate increases in 2017.

The U.S. dollar is up slightly on the news, U.S. indices are holding on to earlier gains so it looks like the result while positive is not a big enough surprise to change expectations that have already been priced in

Now, here is a closer look at what's going on this morning and what is still to come.

MARKET DATA:

Futures (as of about 7:15 a.m. ET)

Dow +0.18 per cent; S&P 500 +0.26 per cent; Nasdaq: +0.12 per cent; TSX 60 +0.38 per cent

Equities
Japan's Nikkei +0.01per cent
Shanghai composite index -0.98 per cent
Hong Kong's Hang Seng +0.23 per cent 
Germany's DAX +0.20 per cent
London's FTSE +0.91 per cent
France's CAC 40 +0.50 per cent

Commodities
WTI crude oil (Nymex Jan.) +7.80 per cent at $48.76 (U.S.) a barrel
Gold (Comex Feb.) -0.25 per cent at $1,187.80  (U.S.) an ounce
Copper (Comex March) +0.06 per cent at $2.61 (U.S.) a pound

Currencies
Canadian dollar +0.44 at 74.82 cents (U.S.)
U.S. dollar index +0.13 at 101.06

Bonds
Canada 10-year bond yield +4.44. at 1.55 per cent

KEY ECONOMIC RELEASES

Japan industrial production
Euro Area CPI
Germany unemployment and retail sales

Also: OPEC meeting in Vienna

(8:15 a.m. ET) U.S. ADP National Employment Report for November. Consensus is an increase of 160,000 from October.

U.S. private employers added 216,000 jobs in November, well above economists' expectations, a report by a payrolls processor showed on Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 165,000 jobs, with estimates ranging from 140,000 to 210,000.


(8:30 a.m. ET) Canada real GDP and chain prices for Q3. Estimates are annualized rate increases of 3.3 per cent and 2.1 per cent, respectively.
(8:30 a.m. ET) Canada real GDP at basic prices for September. Consensus is an increase of 0.1 per cent from previous month.

The Canadian economy slightly exceeded expectations in the third quarter as it grew at an annual pace of 3.5 per cent. Statistics Canada says strong numbers for energy exports helped the country's real gross domestic product bounce back from a second-quarter contraction.

The growth marked a healthy rebound from a second quarter that saw the economy recoil by a revised 1.3 per cent — a decline largely due to wildfires that shut down portions of Alberta's oil country last spring. The report says exports of energy products expanded by 6.1 per cent in the third quarter, following a decline of 5.1 per cent during the previous quarterly period.


(8:30 a.m. ET) Canada industrial product price index and raw materials price index for October. Consensus projections are increases of 0.7 per cent and 3.0 per cent, respectively.
(8:30 a.m. ET) U.S. personal spending and personal income for October. The consensus projections are increases of 0.5 per cent and 0.4 per cent, respectively, from September.
(8:30 a.m. ET) U.S. core PCE price index for October. Consensus is an increase of 0.1 per cent from September and 1.7 per cent year over year.
(10 a.m. ET) U.S. pending home sales for October. Consensus is an increase of 0.1 per cent from September.
(10:30 a.m. ET) EIA petroleum status report.
(2 p.m. ET) U.S. Beige Book release.

KEY STOCKS TO WATCH

Also see: Wednesday's small-cap stocks to watch

Royal Bank of Canada, the country's largest bank by assets, reported a fiscal fourth-quarter profit on Wednesday that fell 2 per cent from the same period last year, missing analyst expectations.

RBC earned $2.54-billion or $1.65 a share, for the fourth quarter. That was down from a profit of $2.59-billion, or $1.74 a share, a year earlier, when the bank's bottom line was boosted by a lower tax rate. Adjusted to exclude items, RBC said it earned $1.69 a share on a cash basis. Analysts polled by Bloomberg were expecting a profit of $1.72 a share.

**

In pipelines, the government of Canada approved the controversial expansion of Kinder Morgan Inc.'s Trans Mountain line to Vancouver.

The government also gave the green light to Enbridge Inc.'s expansion of its main export line to the U.S. – a total of one million barrels a day of added export capacity from Alberta.

However, Prime Minister Justin Trudeau that his government has also killed Enbridge's long-stalled Northern Gateway project that would run through the Great Bear Rainforest to Kitimat, B.C.

Enbridge's U.S.-listed shares gained 3.9 per cent in premarket trading and Kinder Morgan was up 3.1 per cent.

**

Shares of Arrowhead Pharmaceuticals plunged 62 per cent to $1.66 after the gene therapy developer said it would discontinue the development of some of its clinical-stage drug trials.

**

Costamare fell 13.7 per cent after the marine transportation services provider said it would sell 12 million shares at a discount.

**

Earnings include: American Eagle Outfitters Inc.; Descartes Systems Group Inc.; Exco Technologies Ltd.; La-Z-Boy Inc.; PVH Corp.; Redknee Solutions Inc.; Royal Bank of Canada; Synopsys Inc.

With files from wire services

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