cti2015header-morning comments web

Market update

US tsys higher, 10Y  below 1.80% , 1.79 (-4.3bps) with crude below $30, European stocks -2.6%, peripheral spds wider led by Greece  (+42bps). No real catalyst for the ‘risk off’ session –MNI attributing selloff in crude to bearish comments from CEO of Vitol Grp saying crude could remain low for decade, also article in WSJ on large companies reining in capital spending as profit margins are under pressure.  GOCs opening well bid, outperforming tsys in the rally ~2bps in 10s, 30s with the curve 3bps flatter and the 10Y new low 1.07%. Provis opening ~3bps weaker, Ont 46 123/122, Ont 25 112.5/112, QC 48 128.5/127.5.

News headlines

  • European Stocks Fall, Credit Weakens as Signs of Distress Abound (Bloomberg) Signs of distress in financial markets are gathering force as concern over the state of the global economy deepens. European stocks are down for a sixth day and the cost of protecting European banks’ and insurers’ senior debt is on its worst run since March 2013.
  • India Sees Growth Exceeding Estimate as Modi Prepares Budget (Bloomberg) India sees its growth exceeding economists’ estimates to overtake a slowing China, a pace Prime Minister Narendra Modi’s government will be under pressure to sustain when it presents its budget on Feb. 29.
  • Russian Hackers Moved Currency Rate With Malware, Group-IB Says (Bloomberg) Hackers used malware to penetrate the defenses of a Russian regional bank and move the ruble-dollar rate more than 15 percent in minutes, according to a Moscow-based cyber-security firm hired to investigate the attack.
  • Bank of Japan says will disclose findings of probe into negative rate leak (TheGlobeandMail) Bank of Japan Governor Haruhiko Kuroda said on Monday he will publish the outcome of investigations the central bank is conducting into a media leak of its impending decision last month to deploy negative interest rates.
  • Trudeau Said To Tie Bombardier Aid to Governance Changes (Bloomberg) The Canadian government is pushing for changes in the dual-class share structure of embattled aircraft manufacturer Bombardier Inc. in exchange for possible financial aid, officials familiar with the plans said.
  • EU proposals will force multinationals to disclose tax arrangements (TheGuardian) US multinationals such as Google, Facebook and Amazon will be forced to publicly disclose their earnings and tax bills in Europe, under legislation being drafted by the EU executive.
  • Russia plans first bond issuance since sanctions (FT) Russia is exploring international bond issuance for the first time since the war in Ukraine sparked sanctions from the west, in a sign that the Kremlin is keen to find additional sources of revenue as the economy heads for a second year of recession.
  • China’s Forex Reserves May Already Be Below IMF Safety Line (Forbes) Sunday, the People’s Bank of China, the central bank, announced that China’s foreign exchange reserves fell $99.5 billion in January. After the drop, the reserves stood at $3.23 trillion, their lowest level since May 2012. January’s decline was well below consensus forecasts. The latest Bloomberg survey, for instance, predicted the reserves would fall by $120 billion.


Overnight markets 

  • Overview: US 10yr note futures are up 0.34% at 130-26, S&P 500 futures are down -1.27% at 1851.5, Crude oil futures are down -1.49% at $30.43, Gold futures are up 2.38% at $1185.3, DXY is up0.29% at 97.315.

US Economic Data 

  • The Building Permits MoM growth was released at a level of 11.3 % stronger than expected, up 31.2 % from the prior month.

Canadian Economic Data

  • There is no major economic data 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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