Market Update

Tsys open higher, yields 2-3bps lower, US10Y 2.345 (-2bps). Tsys rose after Fed Yellen comments at Univ of Michigan Q&A, then pulled back in Europe with EGBs. France once again the focus, yields under pressure particularly at the short end, 2Y OAT yields are 4.5bps higher on election jitters, as polls show far left candidate Melenchon on the rise. UK gilts lower, curve flatter after UK inflation data even as it was in line with exp (2.3%).  GOCs higher, lagging the rise in tsys by a full 2bps, 10Y 1.59%.  provis opening unch, interest in long rols – Ont 48/46 & QC 48/45s. Mani budget today.

News headlines 

Gold Gains With Treasuries and Yen on Haven Demand: Markets Wrap (Bloomberg) Gold and Treasuries strengthened with the Japanese yen on lingering investor caution about global security risks and the path of U.S. interest rates. Crude ended this year’s best run.

Euro zone Feb industry output falls, largely due to energy (Reuters) Euro zone industrial output declined in February, against market expectations of a slight increase, largely due a sharp drop of energy production, dampening prospects for robust economic growth after bullish sentiment indicators.

Oil eases from five-week top, rising U.S. production weighs (Reuters) Crude oil eased from a five-week high on Tuesday as rising U.S. shale oil production offset concerns over geopolitical tensions in the Middle East and output cuts being made to support prices. The international benchmark for oil prices, Brent crude futures LCOc1, were down 20 cents, or 0.36 percent, from its previous close at $55.78 per barrel at 0702 GMT. Earlier, Brent had climbed to its highest since March 7 at $56.16 a barrel.

Poloz Faces Core Inflation Conundrum as Standing Pat Gets Harder (Bloomberg) The Bank of Canada will almost certainly keep its benchmark interest rate unchanged at 0.5 percent in its decision Wednesday, but with recent data suggesting the economy is on fire, explaining why is getting trickier.

Leftist Melenchon surges as French election candidates bicker (Reuters) A new poll on Tuesday showed far-left wildcard Jean-Luc Melenchon nipping at the heels of the frontrunners in France’s presidential race, building on his recent surge as sniping between the top contenders gathered pace.

Chinese cities restrict home sales by buyers to fight speculation (Reuters) At least twelve major Chinese cities are requiring newly bought homes to be held for at least two to three years before they can be sold, the first time ever that cities in the country are taking such measures and suggesting intensified government efforts to cool the red-hot property market.

Toshiba Warns of Its Ability to Continue as Going Concern (Bloomberg) Toshiba Corp., the 142-year-old conglomerate, warned on Tuesday it may not be able to continue as a going concern as it grapples with billions of dollars in losses from its Westinghouse Electric nuclear business.

Overnight markets 

Overview: US 10yr note futures are up 0.188% at 125-05, S&P 500 futures are down -0.05% at 2351.25, Crude oil futures are down -0.04% at $53.06, Gold futures are up 0.62% at $1261.7, DXY is down -0.18% at 100.84, CAD/USD is down -0.04% at 0.7507.

US Economic Data

6:00 AM NFIB Small Business Optimism Survey, Mar, 104.7, est. 104.7 (prior 105.3)
10:00 AM JOLTS Job Openings, Feb, est. 5650 (prior 5626)

Canadian Economic Data

There is  no major economic news 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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