Market Update
Tsys trading lower, yields 1-2bps higher, 10Y 2.67% after positive US/China headlines after Xi noted important progress in talks. EGBs quiet, bunds slightly higher, gilts flat, Italy 10Y BTPs 7bps higher. Equities in Europe 1.3% higher, S&P futures +6. GOCs lower in line with tsys, early close for family day. The BOC announced it will auction $400mln in 30Y rrbs next Wednesday, with long breakevens showing few signs of life trading in a narrow range ~146bps since Dec
News headlines
Xi says trade talks progress, more meetings next week in U.S (Reuters) Talks between China and the United States this week made important progress, President Xi Jinping told top U.S. trade negotiators on Friday, adding that efforts would continue in Washington next week to resolve their bruising trade war.
Deal or delay? Wall Street doesn’t believe no-deal Brexit threat (Reuters) As the United Kingdom’s Brexit crisis deepens, Goldman Sachs and JPMorgan have differing views of the ultimate outcome but the two titans of Wall Street agree on one thing: They don’t believe there will be a no-deal Brexit.
Exclusive: China offers to end market-distorting subsidies but won’t say how (Reuters) China has pledged to end market-distorting subsidies for its domestic industries but offered no details on how it would achieve that goal, according to three people familiar with the U.S.-China trade talks in Beijing this week.
Risk of U.S. corporate recession rises as earnings outlook dims (Reuters) The outlook for Wall Street earnings has deteriorated significantly in recent months, data shows, raising the risk that companies in the United States may slip into recession before its economy does – with Europe close behind.
European shares recover after Mnuchin calls U.S.-China trade talks ‘productive’ (Reuters) Signs of progress from U.S.-China trade talks in Beijing helped European stocks reverse earlier losses on Friday, while auto shares continued to slide after figures showing an ongoing slump in European car sales.
The Bank of Canada might not be done hiking just yet (BNN) Investors wagering that the Bank of Canada is ready to throw in the towel on its tightening cycle are setting themselves up for disappointment, say market strategists at some of the country’s biggest banks.
U.S. Futures, European Stocks Climb on Trade Hopes: Markets Wrap (Bloomberg) U.S. equity futures tracked European stocks higher as positive developments in the trade outlook overshadowed lingering concerns about global growth. Treasuries held steady and the dollar advanced.
Oil Poised for Weekly Gain as OPEC+ Curbs Counter Trade Worries (Bloomberg) Oil headed for its biggest weekly gain in a month as the OPEC+ coalition’s supply cuts and reduced output from the world’s biggest offshore field overshadowed renewed concern over the U.S.-China trade war.
Trump set to declare border emergency, sign shutdown-averting bill (Reuters) U.S. President Donald Trump was poised on Friday to declare a national emergency at the U.S.-Mexico border, a move that Democrats vowed to challenge as an unconstitutional attempt to fund his proposed border wall without approval from Congress.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.773% | 2 Year | 2.504% |
| 5 Year | 1.797% | 5 Year | 2.485% |
| 10 Year | 1.889% | 10 Year | 2.664% |
| 30 Year | 2.147% | 30 Year | 3.002% |
US Economic Data
| 8:30 AM | Empire Manufacturing, Feb Surv 7.0 Actual 8.8 Prior 3.9 |
| Import Price Index MoM, Jan Surv -0.2% Actual -0.5%Prior -1.0% | |
| Import Price Index YoY, Jan Surv -1.6% Actual -1.7% Prior -0.6% | |
| 9:15 AM | Industrial Production MoM, Jan Surv 0.1% Prior 0.3% |
| Capacity Utilization, Jan Surv 78.7% Prior 78.7% | |
| 10:00 AM | Mortgage Delinquencies , 4Q Prior 4.47% |
| MBA Mortgage Foreclosures, 4Q Prior 0.99% | |
| U. of Mich. Sentiment, Feb P Surv 93.7 Prior 91.2 | |
| 4:00 PM | Net Long-term TIC Flows, Dec Prior $37.6b |
| Total Net TIC Flows, Dec Prior $ 31.0b |
Canadian Economic Data
| 8:30 AM | Int’l Securities Transactions, Dec Actual -18.96b Prior 9.45b |
| 9:00 AM | Existing Home Sales MoM, Jan Surv -0.6% 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