Market Update
US tsy & GOC yields slightly higher, US 10Y 2.50%, low volume in TY futures (278k). Limited move in EGBs, 10Y bund unch 0.001%, UK gilts slightly higher before key EU Brexit summit. Greece outperforming with 10Y Greece/Bund spread at two-month lows. S&P futures slightly lower, crude extending gains above $63 on OPEC supply cuts, unrest in Libya and US sanctions. US Factory Orders/Durable Goods on tap, focus this week on CPI Wed and FOMC minutes on Thursday. Big week for Cdn corp issuance – $3.4bln across 5 issuers including Hydro One, GTAA, Altagas, Pembina, and Reliance LP. Low fills (~7% last week) illustrate demand remains robust across the maturity spectrum despite low all in yields, firm spreads and a flat curve.
News headlines
Stocks Drift With Bonds; Oil Edges Higher on Libya: Markets Wrap (Bloomberg) Investors kicked off the week in a cautious mood, with stocks and government bonds drifting as progress toward a trade deal between America and China continued to drag. Oil rose as fighting in Libya raised the risk of supply outages.
CANADA STOCKS-TSX futures slightly higher as oil at 5-month high (Reuters) Stock futures for Canada’s main stock index edged higher on Monday, as crude oil prices rose to their highest level since November 2018 on OPEC supply cuts, U.S. sanctions against Iran and Venezuela and fighting in Libya.
Investors hit pause as central bank and Brexit risks loom (Reuters) World stocks paused on Monday after a strong recent run, as potential flashpoints including a crucial Brexit summit and central bank meetings loomed, and investors began to look ahead to an earnings season that may be disappointing.
Oil climbs to five-month high on OPEC cuts, U.S. sanctions and Libya fighting (Reuters) Oil prices rose to their highest level since November 2018 on Monday, driven by OPEC supply cuts, U.S. sanctions against Iran and Venezuela and fighting in Libya as well as strong U.S. jobs data.
Saudi Arabia says May will be key to decide on extending oil supply cuts (Reuters) The Saudi energy minister on Monday said it was premature to say whether a consensus existed among OPEC and its allies to extend oil supply cuts but a meeting next month would be key.
Euro edges higher from one-month lows; outlook cloudy (Reuters) The euro edged higher from a one-month low hit last week as investors squared positions before a European Central Bank meeting this week where policymakers may strike a cautious note on the region’s growth outlook.
May to Meet Merkel, Macron Ahead of Key EU Summit: Brexit Update (Bloomberg) Theresa May will meet German Chancellor Angela Merkel and French President Emmanuel Macron on Tuesday, a day before she makes her case for a Brexit extension at a key EU summit in Brussels. She needs to show she has a clear plan to ratify the divorce deal; an official said the government could make a compromise offer to the opposition Labour Party on Monday.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.592% | 2 Year | 2.337% |
| 5 Year | 1.573% | 5 Year | 2.305% |
| 10 Year | 1.704% | 10 Year | 2.499% |
| 30 Year | 1.976% | 30 Year | 2.909% |
US Economic Data
| 10:00 AM | Factory Orders, Feb Surv -0.5% Prior 0.1% |
| Durable Goods Orders, Feb F Surv -1.6% Prior -1.6% | |
| Durables Ex Transportation, Feb F Surv 0.1% Prior 0.1% | |
| Cap Goods Orders Nondef Ex Air, Feb F Prior -0.1% | |
| Cap Goods Ship Nondef Ex Air, Feb F Prior 0.0% |
Canadian Economic Data
| 8:15 AM | Housing Starts, Mar Surv 196.0k Actual 192.5k Prior 173.2k |
| 8:30 AM | Building Permits MoM, Feb Surv 2.0% Actual -5.7% Prior -5.5% |
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