Market Update
US tsys higher before Initial claims, risk off buying after Iran headlines it will retaliate with missile attacks against US forces, US 10Y 1.865% (-1bp), curve 1bp flatter with short end unch. Fed Clarida saying inflation expectations are at low end while tight labor market not putting pressure on inflation as yet. UK gilts leading EGBs higher, 10Y gilt -2.5bps @ 0.79%, BOE Carney speech seen as dovish, noting the BOE still has room to deal with recession. GOCs higher, 1bp tighter vs tsys, 10Y 1.61%, GOC curve continues to steepen led by the long end, 10s30s 12.4bpshighest since late Nov. Pembina in the marker yest with three part 10s & longs said to be ~3x oversubscribed.
News headlines
U.S. Futures Climb on Mideast Calm; Gold Drops: Markets Wrap (Bloomberg) U.S. equity futures advanced on Thursday while stocks rose across Europe and Asia, extending a relief rally after America and Iran appeared to step back from a deeper military conflict. The yen and gold declined, oil steadied after a plunge and the pound retreated.
TSX futures rise as U.S.-Iran tensions cool (Reuters) Canada’s main stock index futures edged higher on Thursday after the United States and Iran retreated from further conflict in the Middle East.
Oil Steadies After Giving Up Gains From U.S.-Iran Hostilities (Bloomberg) Oil steadied after rapidly shedding all of its gains from the clash between the U.S. and Iran, as traders waited to see whether any further hostilities will disrupt exports from the Middle East.
China’s Vice Premier Liu to sign U.S. trade deal in Washington next week (Reuters) China’s Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S. trade talks, will sign a “Phase 1” deal in Washington next week, the commerce ministry said on Thursday.
Back from the brink, back on the bull ride (Reuters) World markets looked to have overcome their new year wobbles on Thursday, as the United States and Iran backed away from conflict in the Middle East.
Tanker owners face insurance headache as Mideast war risk haunts shipping trade (Reuters) Even as the United States and Iran appear to signal a keenness to avoid further conflict, oil and gas shipowners are bracing to pay a price for the war of words that culminated in rocket strikes in Iraq over the last week – higher insurance bills.
Divergent paths: Oil, natural gas going different directions (Reuters) The diverging fundamentals of U.S. oil and natural gas can be seen dramatically in the markets, where the oil-to-gas price ratio has surged to its highest in six years.
World food prices surge for third month to 5-year high in December: U.N. FAO (Reuters) World food prices surged for the third consecutive month to reach a five-year high in December, lifted by strong rises in vegetable oils, sugar and dairy as well as rebounding cereal prices, the United Nations food agency said on Thursday.
Market Overview: US 10yr note futures are up 0.073% at 128-28, S&P 500 futures are up 0.27% at 3269, Crude oil futures are up 0.55% at $59.94, Gold futures are down -0.35% at $1554.7, DXY is up 0.07% at 97.37, CAD/USD is up 0.12% at 0.766.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.635% | 2 Year | 1.574% |
| 5 Year | 1.606% | 5 Year | 1.655% |
| 10 Year | 1.612% | 10 Year | 1.862% |
| 30 Year | 1.732% | 30 Year | 2.345% |
US Economic Data
| 08:30 AM | Initial Jobless Claims, Jan 4 Survey: 220k Prior: 222k |
| Continuing Claims, Dec 28 Survey: 1720k Prior: 1728k | |
| 09:45 AM | Bloomberg Consumer Comfort, Jan 5 Survey: — Prior: 63.9 |
Canadian Economic Data
| 08:15 AM | Housing Starts, Dec Survey: 210.5k Actual: 197.3k Prior: 201.3k |
| 08:30 AM | Building Permits MoM, Nov Survey: 1.00% Prior: -1.50% |
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