cti2015header-morning comments web

Market update

US tsys opening slightly lower, curve flatter, US 10Y 1.931 (+1bp), so far only small reaction to weaker US Dec PCE deflator. Core Euro bonds lower, German 10Y bunds lower ~2bps higher @0.343, after initially rallying on weaker China PMI, giving up gains on  mixed Euro PMIS with UK Jan Man PMI rising to 52.9 vs 51.6 exp and hawkish comments from ECB Nowotny. Latest CFTC COT report for Jan26th showed large specs reducing shorts across the curve, part in the 10Y note going from -68K to +44K. Top Tier US eco data with ISM Manunf later this morn. GOCs unch , spds unch vs tsys. Provis opening unch, Ont 46 119.5/119, Ont 25 108.5/107.5, Ont 25 108.5/107.5. New ont 26 which came at 110 on Friday, 111/110 this morn or 2.5/2.0 vs Ont 25s

News headlines

  • China official manufacturing PMI eases to 49.4 in January, misses forecasts (Reuters) Activity in China’s manufacturing sector contracted more than expected in January, missing market expectations and weaker than the previous month, an official survey showed on Monday.
  • Cheap oil won’t juice the U.S. economy this time: Reuters poll (Reuters) U.S. consumers are cautious about spending their windfall from cheap gasoline and are saving more, according to a Reuters/Ipsos poll and official data, suggesting low oil prices are less of a boon for the U.S. economy than in the past.
  • Oil falls on China data and fading prospects of OPEC action (Reuters) Oil fell nearly four percent on Monday as weak economic data from China, the world’s largest energy consumer, weighed on prices and an OPEC source played down talk of an emergency meeting to stem the decline.
  • Euro-Area Factories Cut Prices as Deflation Risks Loom Large (Bloomberg) Factories in the euro area slashed prices of goods by the most in a year in January, highlighting the deflationary risks that’s keeping alarm bells ringing at the European Central Bank..
  • South Korean Exports Fall at Fastest Pace Since Financial Crisis (WSJ) South Korea’s exports fell at their fastest pace since they were slammed by the fallout from the global financial crisis, the latest warning sign about international trade as concerns mount about the drag on growth from a slowing Chinese economy and withering oil prices. South Korean data are viewed as a proxy for the global trade picture.
  • A huge Ponzi scheme was reported in China ((WSJ) Chinese authorities accused an online financing platform of bilking mostly small investors of more than 50 billion yuan ($7.6 billion) through a Ponzi scheme—the latest allegation of fraud against a loosely regulated part of China’s financial-products market.


Overnight markets

  • Overview: US 10yr note futures are up 0.02% at 129-20, S&P 500 futures are down -0.75% at 1915.5, Crude oil futures are down -3.69% at $32.38, Gold futures are up 0.51% at $1122.1, DXY is down-0.33% at 99.274.

US Economic Data 

  • The Personal Income growth for last month came in at 0.3% as expected, up 0.1% from the previous month
  • The Personal Spending change for last month was released at 0.0 % missing the forecast by 0.1% and down 0.5% from last month
  • The Markit US Manufacturing PMI will be release at 9:45 AM, analysts are expecting a level of 52.6 points
  • The ISM Manufacturing number will be release at 10:00 AM, the actual forecast is 48.4 points
  • The ISM Price paid number will be release at 10:00 AM, the market is expecting a level of 35 points
  • The Construction Spending MoM growth for last month will be release at 10:00 AM, the market is expecting a growth of 0.6% 

Canadian Economic Data 

  • The RBC Canadian Manufacturing PMI will be release at 9:30 AM


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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230