Market Update

Tsys slightly higher, close to highs of overnite range , 10Y  at 2.31% back to Feb lows on decent volume overnite (320k TY1), supported by rally in EGBs. Core Euro bonds higher, 10Y bund 0.238% new low since Feb 28th, block buyer of 10Y bund futures 23k at 6:13am. Peripheral yields lower , curves ~3bps flatter in Italy & Spain, paring yesterdays underperformance vs bunds. GOCs better bid, outperforming tsys thru the curve, 10Y 1.55%. Yest GOCs saw some widening vs tsys in the aftermath of a positive BOC Outlook Survey, investment intentions & employment both strong while the Markit Manuf PMI rose to the highest level since Oct 2013.

News headlines 

Global Stocks Fall After Weak Car Sales, Yen Rises: Markets Wrap (Bloomberg) Stocks took direction from weaker U.S. equities overnight as carmakers reported disappointing trade. Gold strengthened with the yen and dollar while South Africa’s rand dropped on a ratings downgrade.

Oil prices steady as Libyan output rebounds (Reuters) Oil prices steadied on Tuesday as a rebound in Libyan crude production balanced expectations of a draw in U.S. crude oil and product inventories. Benchmark Brent crude oil LCOc1 was up 25 cents at $53.37 a barrel by 1055 GMT. U.S. light crude oil CLc1 was 25 cents higher at $50.49 a barrel.

Yen rises on heightened risk aversion, Aussie hits three-week low (Reuters) The yen gained on Tuesday as a risk-averse investors flocked to the safe-haven currency, while Australia’s dollar sank to a three-week low after its central bank raised concerns about domestic labor conditions.

Canadian Oil Disruption, OPEC Output Cuts Open Door for Mexico (Bloomberg) Canadian crude shipments to the U.S. are poised to shrink just as the effects of OPEC-led output cuts are being felt in the Caribbean. That’s good news for Mexico and other local oil producers. Syncrude Canada Ltd. told customers they wouldn’t receive any supply in April from its 350,000 barrel-a-day upgrader, according to people familiar with the matter.

U.S. business seeks action, not trade war, in Xi-Trump summit (Reuters) Although worried about the prospect of a trade war, American businesses operating in China nonetheless want President Donald Trump to wring some concessions on market access from China’s leader Xi Jingping when the two meet this week.

Trudeau Innovation Shift Already Underway as Ontario Tech Booms (Bloomberg) Things are looking bright for Dan Leibu and League Inc., a digital health and benefits platform he founded with three friends two years ago in Toronto. League plans to triple staff to as many as 200 by the end of the year and start offering services in the U.S. The company provides an alternative to traditional benefit plans offered by insurers, targeting small and medium-sized businesses that appreciate its flexibility and easy access. It received $25 million in venture funding last year from one of Canada’s largest pension plans, among others.

Overnight markets 

Overview: US 10yr note futures are up 0.112% at 125-06, S&P 500 futures are down -0.32% at 2348.5, Crude oil futures are up 0.44% at $50.46, Gold futures are up 0.58% at $1261.3, DXY is up 0.1% at 100.64, CAD/USD is up 0.52% at 0.7434.

US Economic Data

8:30 AM Trade Balance, Feb, -$43.6b, est. -$44.6b (prior -$48.5b, revised -$48.2b)
10:00 AM Factory Orders, Feb, est. 1.0% (prior 1.2%)
Factory Orders Ex Trans, Feb, (prior 0.3%)
Durable Goods Orders, Feb F, est. 1.7% (prior 1.7%)
Durables Ex Transportation, Feb F, (prior 0.4%)
Cap Goods Orders Nondef Ex Air, Feb F, (prior -0.1%)
Cap Goods Ship Nondef Ex Air, Feb F, (prior 1.0%)

Canadian Economic Data

8:30 AM Int’l Merchandise Trade, Feb, -0.97b, est. 0.60b (prior 0.81b, revised 0.42b)


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