Market Update
US Treasuries open NY mainly lower, 30Y exception, curvesflatter, 10Y 2.454%. TOKYO saw Japan’s Nikkei stock index +2.5% in catchup with US rise, pressuring Tsys mildly. Early Asia saw Asian real$ and bank portfolios selling 2Y Tsys, foreign central bank sold 2s. Foreign central bank buying in 3s and 5s, 2way in 10s and Asian buying of 10Y, Asian real money buyng in 30Ys. Asian selling arose in 5Y, 7Ys.
News headlines
U.S. stock futures rise ahead of Fed minutes (Reuters) U.S. stock index futures were slightly higher on Wednesday as investors awaited the release of the minutes of the Federal Reserve’s December meeting in which the central bank raised interest rates. The Fed raised rates for the first time last year, citing strength in the labor market and a slight uptick in inflation. Investors will be keen to assess policymakers’ view on inflation, especially after a spate of strong economic data.
Oil prices rise on expected drop in U.S. inventories (Reuters) Oil prices ticked higher on Wednesday on expectations that U.S. crude inventories are falling and signs that oil producers will stick to agreed output cuts that took effect this week. Global benchmark Brent crude futures LCOc1 were up 10 cents at $55.57 a barrel by 1110 GMT (6:10 a.m. ET). The contract reached an 18-month high in the previous session, but a strong dollar has shaved off most of those gains.
Euro-Area Inflation Outpaces Expectations as Oil Surges (Bloomberg) Euro-area inflation accelerated in December at the fastest pace since 2013, suggesting that a debate about the appropriate degree of European Central Bank stimulus is about to gather momentum.
China Said to Consider Options to Back Yuan, Curb Outflows (Bloomberg) China has studied possible scenarios for the yuan and capital outflows this year and is preparing contingency plans, according to people familiar with the matter. The offshore yuan surged the most in a year.
Trump Tariff on GM Would Violate Nafta. That May Not Stop Him (Bloomberg) As president, Donald Trump won’t be able to punish General Motors Co. for building cars in Mexico without violating Nafta. That may not stop him from taking an unprecedented step against an American company. Trade experts agree that presidents have wide latitude to impose penalties on imports, at least temporarily, even if courts later find them unlawful.
Investment banking fees fall 7 percent in 2016 dragged down by equity raisings (Reuters) Investment banking fees fell 7 percent worldwide in 2016, dragged down by a 23 percent fall in equity capital market (ECM) fees, Thomson Reuters data showed on Wednesday, raising the pressure on banking giants fighting to restore profitability.
Overnight markets
Overview: US 10yr note futures are down -0.1385% at 123-30, S&P 500 futures are up 0.23% at 2257.75, Crude oil futures are up 0.67% at $52.68, Gold futures are up 0.32% at $1165.7, DXY is down -0.28% at 102.92, CAD/USD is down -0.79% at 0.7507.
US Economic Data
| 2:00 PM | FOMC Meeting Minutes release from December 13-14 meeting |
| Wards Domestic Vehicle Sales, Dec, est. 13.70m (prior 13.85m) | |
| Wards Total Vehicle Sales, Dec, est. 17.70m (prior 17.75m) |
Canadian Economic Data
| 7:00 AM | MLI Leading Indicator, m/m, Nov, 0.3% (prior 0.3%, revised 0.4%) |
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