Market Update

US tsys weaker, yields 1-2bps higher, 10Y 2.74% (+1.5bps), low volume in TY futures (250k). Core Euro bonds lower, bunds pressured by large futures block trade ~7:00am at 162.97 (EU 820k/bp), while Eurozone Jan Retail Sales came in above exp (2.2% vs 2.1%) . Italian BTPs higher on stronger than exp Feb services PMI.  US equity futures higher, S&P +2.75 having given up earlier gains. ISM non-manuf index for Feb and Dec New Home Sales focus for US data today.  GOCs lower in line with tsys, no data ahead of BOC decision tomorrow. GOCs well bid yesterday all day, extending outperformance after resignation from Trudeau cabinet. Can/US 3-9bps tighter over the week led by the short end, GOC curve close to recent steeps 2s30s 42bps.  Provis opening unch, Alberta 10Y deal  rumoured

News headlines

Stocks Drift, Dollar Climbs as Trade News Awaited: Markets Wrap (Bloomberg) Global stocks drifted on Tuesday as investors searched for fresh direction after China lowered its growth forecasts and as speculation endured that a Sino-American trade deal is near. Treasuries declined while the dollar strengthened for a fifth day.

Stock futures inch higher, progress in U.S.-China trade talks in focus (Reuters) U.S. stock futures ticked higher on Tuesday, a day after the Dow Jones Industrial Average and the S&P 500 posted their biggest drop in nearly a month, as investors hoped for an U.S.-China trade deal as early as this month.

Oil Steadies as Traders Weigh China Response to Slowing Growth (Bloomberg) Oil steadied, reversing earlier losses, as traders assessed Chinese measures to protect economic growth in the world’s second-biggest fuel user.

Second Canadian minister quits over scandal, Trudeau taking it ‘seriously’ (Reuters) In a serious blow to Canadian Prime Minister Justin Trudeau, a second member of his Cabinet resigned on Monday, saying she had lost confidence in how the government had dealt with an escalating political scandal.

Trump scraps trade privilege for India; Delhi plays down impact (Reuters) U.S. President Donald Trump looked set to open a new front in his trade wars on Monday with a plan to end preferential trade treatment for India that allows duty-free entry for up to $5.6 billion worth of its exports to the United States.

China to slash taxes, boost lending to prop up slowing economy (Reuters) China sought to shore up its slowing economy through billions of dollars in planned tax cuts and infrastructure spending, with economic growth at its weakest in almost 30 years due to softer domestic demand and a trade war with the United States.

Canadian dollar hits near three-week low ahead of Bank of Canada rate decision this week (The Globe And Mail) The Canadian dollar weakened to its lowest point in nearly three weeks against its U.S. counterpart on Monday, as the greenback climbed broadly and investors bet the Bank of Canada would leave interest rates unchanged later this week.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.755% 2 Year 2.553%
5 Year 1.776% 5 Year 2.546%
10 Year 1.906% 10 Year 2.737%
30 Year 2.177% 30 Year 3.1%

US Economic Data

9:45 AM Markit US Services PMI, Feb F Surv 56.2 Prior 56.2
        Markit US Composite PMI, Feb F Prior 55.8
10:00 AM ISM Non-Manufacturing Index, Feb Surv 57.4 Prior 56.7
         New Home Sales, Dec Surv 600k Prior 657k
        New Home Sales MoM, Dec Surv -8.7% Prior 16.9%
2:00 PM Monthly Budget Statement, Jan Surv $10.0b Prior -$13.5b

Canadian Economic Data

There is no Canadian economic data for today.

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

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