Market Update

US cash markets closed for MLK holiday, with very low volume in TY futures (~95k). The USD index under pressure, close to a three-year low. Core Euro bonds mixed, UK gilts higher, flatter on rise in political risk as UK construction firm Carillion filed for bankruptcy. GOCs unch, 10Y 2.17%, ~5bps off the highs of last Wednesday which was the highest since Sep 14, with longs outperforming possibly due to the relative lack of long provi/corp supply so far this year. We expect the BOC to hike rates this week despite NAFTA headlines – the latest BOC Business Outlook Survey reflected increasing capacity & wage pressures, while the overall BOS indicator bouncing back almost to its peak of last summer, this is in line with the BOC’s own view of a rapidly tightening labor market and rising inflation.

News headlines

Dollar Slide Deepens as Euro Strength Saps Stocks: Markets Wrap (Bloomberg) Despite the U.S. holiday, the dollar dominated trading on Monday as it headed for a fourth day of declines, weakening against almost every major currency. The euro’s jump weighed on European stocks, while gold gained.

Ford Goes ‘All In’ on Electric Cars (Bloomberg) Ford Motor Co. will more than double spending on electrified vehicles, amplifying its investment in a segment that the auto industry sees growing from what’s now just a fraction of the market.

U.S. inflation jumps, boosting likelihood of rate hike (CBC News) Underlying U.S. consumer prices saw their biggest jump in 11 months in December, boosting expectations that inflation will keep the Federal Reserve on the path of raising interest rates.

Royal Bank, TD and CIBC raise their fixed 5-year mortgage rates (CBC News) Three of Canada’s biggest banks have hiked the rate on their benchmark five-year mortgage, and more are expected to follow suit. The Royal Bank of Canada raised its posted rate for a five-year, fixed-rate mortgage by 15 points to 5.14 per cent, the bank confirmed to CBC News in an email.

Final Sears Canada stores shuttered for good (CBC News) All remaining Sears Canada stores will close their doors for good on Sunday, including 17 in Ontario. The department store chain had been in business in Canada since 1953, but struggled in recent years to adapt to the internet age and a changing retail environment.

TSX futures lower as oil prices slip (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Monday as oil slipped on signs that production cuts by OPEC and Russia are tightening supplies.

Overnight markets

Overview: US 10yr note futures are up 0.051% at 123-00, S&P 500 futures are up 0.16% at 2793.25, Crude oil futures are down -0.08% at $64.25, Gold futures are up 0.55% at $1342.3, DXY is down -0.61% at 90.416, CAD/USD is down -0.24% at 0.8044. 

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.758% 2 Year 1.998%
5 Year 1.971% 5 Year 2.347%
10 Year 2.172% 10 Year 2.546%
30 Year 2.367% 30 Year 2.849%

US Economic Data

There is no US Economic Data for today.   

Canadian Economic Data

9:00 AM Existing Home Sales MoM, Dec (3.9% prior)
10:00 AM Bloomberg Nanos Confidence, Jan 12th est 19.0 (18.0 prior)


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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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