Market Update
US tsys trading higher, close to o/n highs on strong volume (423k TY), 10Y 2.71 (-3bps) with the curve steeper – Dec CPI expected to have declined 0.1% m/m , core +0.2%. US equity futures lower, S&P -8, Nasdaq -30. Speculation that Trump may call a state of emergency has buoyed tsys, which are outperforming both bunds and gilts. UK gilts reversed earlier gains on report Brexit could be delayed beyond March 29th . GOCs higher, in line with tsys, 10Y 2.95%. USDCAD lower, 1.32 25 as crude close to one month highs 52.33.
News headlines
Powell says Fed has room to be patient as economy evolves in 2019 (TheGlobeandMail) Federal Reserve Chairman Jerome Powell said on Thursday the U.S. central bank has the ability to be patient on policy given inflation is stable, allowing it to assess whether the U.S. economy will slow this year as some in financial markets worry.
Canadian dollar keeps most of its recent gains as oil prices rise (TheGlobeandMail) The Canadian dollar weakened against its U.S. counterpart on Thursday as the greenback broadly climbed, but the loonie held on to most of its recent gains as stocks and oil prices turned higher.
China to set lower GDP growth target of 6-6.5 percent in 2019 (Reuters) China plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand.
Small steps from stocks after rally, giant leap for yuan (Reuters) Soothing words from the world’s top central banks helped stocks consolidate a strong start to 2019 on Friday, while China’s yuan capped its best week since it shed its dollar peg in 2005.
Oil set for weekly gain on trade optimism, OPEC-led supply cuts (Reuters) Oil prices rose slightly on Friday, putting them on track for solid weekly gains after financial markets strengthened due to hopes the United States and China may soon resolve their trade dispute.
TSX futures point to lower opening (Reuters) Stock futures for Canada’s main stock index edged lower on Friday, a day after hitting a one-month high following a five-day rally.
Pound pares gains as government denies Brexit date might be delayed (BNN) The pound rallied to the highest since November on a report that Brexit could be delayed beyond the March deadline, before paring gains as the government ruled out an extension.
Larger drop in weekly jobless claims points to healthy U.S. economy (TheGlobeandMail) The number of Americans filing applications for jobless benefits fell more than expected last week, pointing to sustained labour market strength that could further assuage concerns about the economy’s health.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.895% | 2 Year | 2.545% |
| 5 Year | 1.904% | 5 Year | 2.537% |
| 10 Year | 1.965% | 10 Year | 2.713% |
| 30 Year | 2.17% | 30 Year | 3.043% |
US Economic Data
| 8:30 AM | CPI Mom, Dec 0.0% -0.1% est -0.1% |
| CPI Ex Food and Energy MoM, Dec 0.2% est 0.2% | |
| CPI Ex Food and Energy YoY, Dec 2.2% est 2.2% | |
| CPI YoY, Dec 2.2% est 1.9% |
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