Market Update

US tsys trading sharply higher, yields 3-4bps lower, 10Y 2.66%, on heavier volume in TY futures ( ~450k). The latest uptick in prices within the last hour after BOE decision (2019 growth forecast downgraded to 1.2% from 1.7%), Carney warning that Brexit uncertainty weighing on economy. The ECB lowered its forecast for 2019 GDP growth for the Eurozone to 1.3% from 1.9% in Nov. , Italy from 1.2% to 0.2% – BTPs ~10bps wider vs bunds.  US stock futures lower (S&P -16/0.60%, Nasdaq -48) the USD higher for a sixth day. GOC yields lower, 1-1.5bps tighter vs tsys. No data in Canada today – Jan Employment tomorrow. The BOC auctions $3bln new 2Y bonds at noon – May 2021s with the WI roll 0.6/0.4 (unch)

News headlines

Futures down as growth worries resurface (Reuters) U.S. stock futures fell on Thursday as worries of slowing global growth resurfaced after the European Union cut its economic growth forecasts, while investors waited for the next breakthrough in U.S.-China trade negotiations.

Bank of England sees weakest UK outlook since 2009 on Brexit, global slowdown (Reuters) The Bank of England said Britain faced its weakest economic growth in 10 years in 2019, blaming mounting Brexit uncertainty and the global slowdown, but it stuck to its message that interest rates will rise if a Brexit deal is done.

EU slashes euro zone growth outlook, expects inflation to slow (Reuters) The European Commission sharply cut on Thursday its forecasts for euro zone economic growth this year and next because it expects the bloc’s largest countries to be held back by global trade tensions and an array of domestic challenges.

World shares go weak as data disappoints, dollar extends power surge (Reuters) Mounting global growth worries thrust share markets into reverse on Thursday, while the dollar scored its longest winning run since a hot streak in early October that helped trigger a wave of worldwide ‘bear’ markets.

Euro slips to two-week low after EU cuts growth forecast (Reuters) The euro fell to a two-week low on Thursday after the European Commission sharply cut its forecasts for economic growth in the euro zone.

Partial oil upgrading the latest fix for Canada’s pipeline problem (Reuters) Canada’s struggling oil industry is looking to what is known as partial upgrading technology to thin its sludge-like crude and squeeze more of it through congested pipelines.

TSX futures fall on lower oil prices (Reuters) Futures for Canada’s main stock index fell on Thursday, pressured by a slip in crude prices.

Trump nominates global-order critic Malpass to lead World Bank (BNN) President Donald Trump nominated senior Treasury official David Malpass to lead the World Bank, choosing a loyalist who has been sharply critical of China and has called for a shakeup of the global economic order.

U.K. and Canada Can Avoid New Tariffs Post-Brexit, Envoy Says (Bloomberg) The U.K.’s top envoy to Canada says she’s confident the two countries can avoid new tariffs after Brexit scuttles their existing trade agreement.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.783% 2 Year 2.498%
5 Year 1.8% 5 Year 2.471%
10 Year 1.89% 10 Year 2.668%
30 Year 2.146% 30 Year 3.012%

US Economic Data

8:30 AM Initial Jobless Claims, Feb-02 Surv 221k Prior 253k
   Continuing Claims, Jan-26 Surv 1733k Prior 1782k
9:45 AM Bloomberg Consumer Comfort, Feb-03 Prior 57.4
3:00 PM Consumer Credit, Dec Surv $17.000b Prior $22.149b

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