Market Update

US & Cdn mkts slightly lower before US CPI/retail sales data, US 10Y 2.55%. EGBs mixed, bund curve continues to flatten in anticipation of ECB shift after yesterday’s minutes, while the Euro is at a three year high. JPM down ~1.0% pre mkt after earnings came in better than expected for the fourth quarter –  S&P futures +4.25. Provincial spreads closed wider for a second day, no supply this week. 

News headlines

An Inflation Breakout Would Be Worse for Markets Than a Depression (Bloomberg) Lowflation drove global markets to dizzying highs this year. Inflation could drive them off a cliff. The risk for 2018 is that consumer price growth stages a comeback, roiling investor portfolios and corporate profits, according to investors and strategists. The consequent return of higher real interest rates would imperil bullish market psychology more than you might think.

China Sets New Records for Gobbling Up the World’s Commodities (Bloomberg) China continues to gobble up the world’s commodities, setting new records for consumption of everything from crude oil to soybeans.

Merkel’s Bid to End German Gridlock Hangs on Crucial SPD Vote (Bloomberg) Chancellor Angela Merkel reached a preliminary accord with the Social Democrats to end Germany’s political gridlock, moving closer to a fourth term and defying domestic critics who say her time is running out.

Bitcoin Rebounds, Still Heads for Weekly Slump as Scrutiny Rises (Bloomberg) Bitcoin advanced on Friday for the first time this week as regulators around the world increased their scrutiny of the largest cryptocurrency, with concerns ranging from investor losses to strains on power systems.

JPMorgan profit beats on higher interest rates; debt trading down (Reuters) JPMorgan Chase & Co (JPM.N), the biggest U.S. bank by assets, reported a higher-than-expected quarterly profit on Friday as gains in net interest income offset a slowdown in trading revenue.

Chinese bitcoin miners eye sites in energy-rich Canada (Reuters) China’s Bitmain Technologies is eyeing bitcoin mining sites in Quebec, a company spokesman told Reuters, as expectations of a potential Chinese crackdown on cryptocurrency mining make the energy-rich Canadian province an attractive alternative.

Futures point to higher opening for TSX (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Friday, with March futures on the S&P TSX index SXFc1 up 0.19 percent at 7:15 a.m. ET.

Overnight markets

Overview: US 10yr note futures are down -0.089% at 123-01, S&P 500 futures are up 0.14% at 2773.5, Crude oil futures are down -1% at $63.16, Gold futures are up 0.82% at $1333.3, DXY is down -0.58% at 91.315, CAD/USD is up 0.03% at 0.7986.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.758% 2 Year 1.985%
5 Year 1.967% 5 Year 2.33%
10 Year 2.174% 10 Year 2.546%
30 Year 2.384% 30 Year 2.869%

US Economic Data

8:30 AM CPI MoM, Dec est 0.1% (0.4% prior)
CPI Ex Food and Energy MoM, Dec est 0.2% (0.1% prior)
CPI YoY, Dec est 2.1% (0.1% prior)
CPI Ex Food and Energy YoY, Dec est 1.7% (1.7% prior)
CPI Index NSA, Dec est 246.372 (246.669 prior)
CPI Core Index SA, Dec est 254.333 (253.724 prior)
Retail Sales Advance MoM, Dec est 0.5% (0.8% prior)
Retail Sales Ex Auto MoM, Dec est 0.3% (1.0% prior)
Real Avg Weekly Earnings YoY, Dec (0.8% prior)
Real Avg Hourly Earning YoY, Dec (0.2% prior)
10:00 AM Business Inventories, Nov est 0.4% (-0.1% prior)

Canadian Economic Data

8:30 AM Teranet/National Bank HP Index, Dec (217.0 prior)
Teranet/National Bank HPI MoM, Dec (-0.5% prior)
Teranet/National Bank HPI YoY, Dec (9.2% 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