Market Update
US tsys trading lower, 10y 2.74% (+2.5bps), risk on with S&P futures higher (+6) as well as European stocks. Positive earnings from Goldman and BOA after disappointment from JPM yest. Core Euro bonds lower, wider vs tsys led by UK gilts as PM May faces no-confidence vote, pressure at the long end of the curve with 2s10s curve 3bps steeper, 10Y gilt yield +7bps, highest since Nov 30th. In Canada, GOCs lower in line with tsys, 10Y 1.99% – two week high, while spd vs tsys basically sideways over the last week.
News headlines
World stocks hold nerve after May’s Brexit defeat, pound steady (Reuters) World equity markets on Wednesday held their nerve after the heavy parliamentary defeat of British Prime Minister Theresa May’s Brexit deal as investors saw potential for legislative deadlock forcing London to delay its departure from the EU.
Search on for Brexit consensus after May’s crushing defeat (Reuters) Prime Minister Theresa May on Wednesday will try to forge consensus in parliament on a Brexit divorce agreement after the crushing defeat of her own deal left Britain’s exit from the European Union in disarray 10 weeks before it is due to leave.
Trump orders thousands back to work without pay to blunt shutdown disruption (BNN) The Trump administration has ordered thousands of furloughed federal employees back to work without pay to inspect planes, issue tax refunds, monitor food safety and facilitate the sale of offshore oil drilling rights.
Canadians Back Trudeau’s Pipeline, But His Own Voters Are Wary (Bloomberg) A wide margin of Canadians support an oil pipeline that Prime Minister Justin Trudeau’s government is pushing to build — though it remains unpopular among some voting blocs key to his reelection, a poll has found.
TSX futures down on falling oil prices (Reuters) Futures for Canada’s main stock index fell on Wednesday, as oil prices slipped on concerns over slowing global economic growth.
Oil edges down on worries over global economy, supply glut (Reuters) Oil prices edged down on Wednesday having climbed about 3 percent in the previous session, with worries about the global economy and forecasts of swelling U.S. production hurting sentiment.
China central bank’s record $83 billion injection heightens worries over ailing economy (Reuters) China’s central bank injected a record $83 billion into the country’s financial system on Wednesday, seeking to avoid a cash crunch that would put further pressure on the weakening economy.
Canada investment intentions flat as economy plateaus: BDC (BNN) Canada’s small business managers plan to keep their investment spending flat this year, according to a new survey that mirrors a crucial question asked by the central bank.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.911% | 2 Year | 2.549% |
| 5 Year | 1.929% | 5 Year | 2.552% |
| 10 Year | 1.992% | 10 Year | 2.738% |
| 30 Year | 2.217% | 30 Year | 3.102% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Jan 11 Actual 13.5% Prior 23.5% |
| 8:30 AM | Import Price Index MoM, Dec surv -1.3% Prior -1.6% |
| Import Price Index YoY, Dec surv -0.8% Prior 0.7% | |
| 10:00 AM | NAHB Housing Market Index, Jan Surv 56 Prior 56 |
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