Market Update
US tsys trading slightly lower, 10y 2.65 (+1bp) , close to top of o/n range , rallying with bunds/gilts on comments from UK Attorney General that legal risk to Irish backstop remains unchanged – ahead of key vote on Brexit later today. Feb CPI and $24bln 10Y note auction the focus for US tsys today. CPI expected to show another 0.2% rise in the core, remaining at 2.2% y/y. GOCs lower, in line with tsys, Can/US another 2bps tighter yest, 81bps thru in the 5Y, narrowest since June 2017 right before the BOC embarked on its 125bp rate tightening campaign. CMB 5Y reopening scheduled for Wed (pricing Thurs) – we mentioned in our Provi comment last week that 5Y CMBs look attractive on recent cheapening, and vs Ontarios. Please let us know if you have interest.
News headlines
Futures slightly higher ahead of inflation data (Reuters) U.S. stock index futures inched higher on Tuesday, taking cues from global stocks which rose after last-minute tweaks to Britain’s deal to leave the European Union that eased some fears of a no-deal Brexit, and as investors waited for inflation data.
‘Absurd’ to say Trump unreliable trade negotiator with China: White House (Reuters) The White House said on Monday it was “absurd” to suggest that President Donald Trump was an unreliable negotiator as China reportedly balks at a summit with President Xi Jinping over concerns Trump would walk away from a trade deal.
Rate cut coming with Canada ‘one notch’ from recession: Rosenberg (BNN) The next move from the Bank of Canada will be to cut to interest rates, according to David Rosenberg, who says the economy is just “one notch away” from a recession.
CANADA STOCKS-TSX futures up as oil prices rise (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Tuesday, tracking gains in oil prices.
OECD troubled by allegations Canada meddled in SNC-Lavalin case (Reuters) A major intergovernmental economic group expressed its concern on Monday over allegations the Canadian government tried to interfere in a criminal case against a major construction firm and reminded Ottawa of its promise to respect the independence of prosecutors.
Japan firms wary of wage hike as economy wobbles amid trade war, global slowdown (Reuters) Big Japanese firms are set to offer smaller pay increases this year at annual wage talks on Wednesday as the economy sputters, tempering hopes that domestic consumption will offset external risks to growth.
Pound Drops Before Brexit Vote, Stock Rally Fades: Markets Wrap (Bloomberg) U.S. equity futures edged lower, European stocks turned negative and the pound tumbled after a legal ruling called into question the likelihood of a last-minute breakthrough on Brexit. Treasuries fell and the dollar was steady.
Oil Rises on Tighter Venezuela, Saudi Supplies (Bloomberg) Oil rose to the highest in more than a week after Saudi Arabia was said to plan extending deep supply curbs and a nationwide blackout sparked a production collapse in Venezuela.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.661% | 2 Year | 2.483% |
| 5 Year | 1.648% | 5 Year | 2.451% |
| 10 Year | 1.758% | 10 Year | 2.648% |
| 30 Year | 2.054% | 30 Year | 3.038% |
US Economic Data
| 6:00 AM | NFIB Small Business Optimism, Feb Surv 102.5 Actual 101.7 Prior 101.2 |
| 8:30 AM | CPI MoM, Feb Surv 0.2% Prior 0.0% |
| CPI Ex Food and Energy MoM, Feb Surv 0.2% Prior 0.2% | |
| CPI YoY, Feb Surv 1.6% Prior 1.6% | |
| CPI Ex Food and Energy YoY, Feb Surv 2.2% Prior 2.2% | |
| CPI Core Index SA, Feb Surv 261.193 Prior 260.701 | |
| CPI Index NSA, Feb Surv 252.837 Prior 251.712 |
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