Market Update
Tsys trading 2bps higher after Jan CPI came in weaker than exp – 0.0%/1.6% vs 0.1%/1.5% exp), core 1.6% vs 1.5% exp – 10Y 2.70%. Global equities extending gains after data, S&P futures + 8. Trade news with Trump mentioning he is ready to extend the March 1st deadline to raise Chinese tariffs. GOCs lower in line with tsys, 10Y 1.94%. Canada 5Y auction at noon – $3.0bln reopening March 24s with the M24/5Y roll 0.4/0.3 at the lows of the three month range (0.3- 2.8bps). March 24s @1.85% 8bps lower than at last auction Jan 16th. CMB 10Y pricing this morning , spread 49bps.
News headlines
Stock futures gain on trade optimism; inflation data eyed (Reuters) U.S. stock index futures rose on Wednesday, driven by optimism over the ongoing U.S.-China trade talks, and as investors awaited the latest inflation data.
‘So far, so good,’ Mnuchin says of trade talks in China (Reuters) U.S. Treasury Secretary Steven Mnuchin said talks with China went well on Wednesday, as the world’s two largest economies try to iron out an agreement to resolve their trade dispute.
Oil rises after Saudi output pledge, declining U.S. inventories (Reuters) Brent oil prices rose on Wednesday, after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production, while U.S. futures gained on a decline in domestic oil inventories.
Euro zone industrial production falls more than expected in December (Reuters) Euro zone industrial production fell more than expected in December, official estimates showed on Wednesday, pulled down by a drop in the output of capital goods, used for investment.
Ottawa, Saskatchewan set for ‘monumental’ carbon tax clash (BNN) Legal experts, government officials and industry leaders will all watch this week as Saskatchewan and Ottawa head to court over the constitutionality of a federally imposed carbon tax.
Powell says U.S. economy ‘strong’ but prosperity missing some places (BNN) Federal Reserve Chairman Jerome Powell said the U.S. economy is “strong” though its benefits haven’t been felt evenly across the country.
Trump open to letting March 1 deadline for China tariffs slide (BNN) President Donald Trump said he is open to letting a March 1 deadline to raise tariffs on Chinese products pass without penalty if the two sides are near an agreement, sending a conciliatory signal as talks to resolve a trade war between countries continue.
Trump Edges Toward Taking Shutdown-Averting Border Deal (Bloomberg) President Donald Trump is eyeing a path to avoid another government shutdown where he would reluctantly accept the congressional border-security deal and attempt to tap other funds for his wall.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.801% | 2 Year | 2.512% |
| 5 Year | 1.828% | 5 Year | 2.498% |
| 10 Year | 1.918% | 10 Year | 2.686% |
| 30 Year | 2.165% | 30 Year | 3.023% |
US Economic Data
| 7:00 | MBA Mortgage Applications, Feb 8 Actual -3.7% Prior -2.5% |
| 8:30 | CPI MoM, Jan Surv 0.1% Actual 0.0% Prior -0.1% |
| CPI Ex Food and Energy MoM, Jan Surv 0.2% Actual 0.2% Prior 0.2% | |
| CPI YoY, Jan Surv 1.5% Actual 1.6% Prior 1.9% | |
| CPI Ex Food and Energy YoY, Jan Surv 2.1% Actual 2.2% Prior 2.2% | |
| CPI Core Index SA, Jan Surv 260.603 Actual 260.701 Prior 260.027 | |
| CPI Index NSA, Jan Surv 251.625 Actual 251.712 Prior 251.233 | |
| Real Avg Weekly Earnings YoY, Jan Actual 1.9% Prior 1.2% | |
| Real Avg Hourly Earning YoY, Jan Actual 1.7% Prior 1.1% | |
| 2:00 PM | Monthly Budget Statement, Dec Surv -$11.0b Prior -$204.9b |
Canadian Economic Data
| 8:30 AM | Teranet/National Bank HPI MoM, Jan Actual -0.1% Prior -0.3% |
| Teranet/National Bank HP Index, Jan Actual 223.96 Prior 224.07 | |
| Teranet/National Bank HPI YoY, Jan Actual 2.2% Prior 2.5% |
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