cti2015header-morning comments web

Market Update

Rates trading weaker, lower half of modest overnight range. Relative quiet with ongoing risk-on mood after US President Trump promised new tax measures Thursday. US Treasuries prices open NY weaker after overnight two-way flows. Trump/Japanese PM Abe joint news conference at 1pm ET. The Organization of Petroleum Exporting Countries (OPEC) has received an early and key endorsement of its effort to reduce the global oversupply of oil.International Energy Agency said OPEC had achieved 90% compliance with its agreement last year to lower production, best compliance in its history with respect to an agreement to curb production. Saudi Arabia appeared to cut more than was agreed on at the meeting with some key non-OPEC members in November.

News headlines 

Stock futures edge up after Wall St. hits record high (Reuters) U.S. stock index futures were slightly higher on Friday, a day after Wall Street hit record high on President Donald Trump’s promise to unveil a tax reform plan in the coming weeks. Trump called the tax plan as « phenomenal », but offered no specifics other than citing the need to lower tax burden on businesses.

Oil rises on signs of record compliance with OPEC output deal (Reuters) An OPEC-led production cut may well be accelerating a drawdown in global oil stocks that began last year, but implementing the reduction for just six months means the producer group will fall short of achieving its objective of rebalancing the market.

Euro zone, IMF agree on a common stance on Greece: official (Reuters) Euro zone lenders and the International Monetary Fund have reached agreed between themselves to present a common stance to Greece later on Friday in talks on reforms and the fiscal path Athens must take, euro zone officials said. Such a united stance would be a breakthrough because the two groups have differed for months on the size of the primary surplus Greece should reach in 2018 and maintain for years later as well as the issue of debt relief.

UK manufacturing jump shows economy ended 2016 strongly despite Brexit vote (Reuters) British manufacturing grew more strongly than expected in December, showing the economy remained resilient to the end of the year despite June’s Brexit vote shock, although 2017 looks likely to be more difficult. Official data released on Friday also showed the country’s smaller construction sector grew more quickly in December than many economists had forecast, while the trade deficit narrowed.

OpenText has been on a US$3 billion buying spree, and its CEO says it’s not done yet (Financial Post) Canada’s largest software company expects to get even bigger. Waterloo, Ont.-based Open Text Corp. has spent almost US$3 billion on acquisitions over the past three years, including its recently-closed purchase of Dell EMC’s enterprise content division. It was the company’s largest purchase, at US$1.62 billion, and it made OpenText the world’s largest vendor of software that helps businesses organize and store their documents.

Suncor says building delays behind cost hikes at Fort Hills oil sands (TheGlobeAndMAil) Suncor Energy Inc. is blaming construction delays and design changes for cost increases at its Fort Hills oil sands mine as the project nears completion amid uncertain oil markets. Suncor said the price tag for the sprawling Northern Alberta project now stands between $16.5-billion and $17-billion, up from $15.1-billion previously, after work on the project was halted for about a month during last year’s wildfires.

Overnight markets 

Overview: US 10yr note futures are down -0.1876% at 124-22, S&P 500 futures are up 0.13% at 2307.25, Crude oil futures are up 1.49% at $53.79, Gold futures are down -0.65% at $1228.8, DXY is up 0.24% at 100.89, CAD/USD is down -0.51% at 0.7645.

US Economic Data

8:30 AM Import Price Index, m/m, Jan, 0.4%, est. 0.3% (prior 0.4%, revised 0.5%)
  Import Price Index, y/y, Jan, 3.7%, est. 3.4% (prior 1.8%, revised 2.0%)
10:00 AM University of Michigan Sentiment,  est. 98.0 (prior 98.5)
2:00 PM Monthly Budget Statement, Jan,  est. $45.0b (prior -$27.5b)

Canadian Economic Data

8:30 AM Unemployment Rate, Jan, 6.8%, est. 6.9% (prior 6.9%)
  Net Change in Employment, Jan , 48.3k, est. -10.0k (prior 53.7k)
  Full time Employment Change, Jan, 15.8, (prior 81.3)
  Part Time Employment Change, Jan, 32.4, (prior -27.6)
  Participation Rate, Jan, 65.9, est. 65.8 (prior 65.8)


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