cti2015header-morning comments web

Market Update

With the Martin Luther King holiday in the US, the Treasury market is really a by-stander in European trading. The volumes on the 10-year contract are running at around 60% of the averageof the past 10 days.
There is no cash activity and while swap market is trading, it is thin. UK Gilt yields have fallen in London Monday morning trading, supported by fresh overnight fall in the value of UK Sterling in wake of weekend
press reports of speculation of PM Theresa May’s Brexit speech scheduled for Tuesday.

News headlines 

Brexit Plans Rattle Pound and Stocks as Gold Rises: Markets Wrap (Bloomberg) The pound fell, equities slid and gold climbed on concern U.K. Prime Minister Theresa May is prepared to lead Britain out of the European Union’s single market and as the U.S. President-elect suggested other countries could break from the bloc. Sterling fell below $1.20 for the first time since October after the Sunday Times said May is ready to withdraw from tariff-free trade with the region in return for the ability to curb immigration and strike commercial deals with other countries.

Oil prices slip on doubts over output cuts (Reuters) Oil prices slipped on Monday, pressured by doubts that large oil producers will reduce production as promised and on expectations that U.S. production would increase again this year. Benchmark Brent crude oil LCOc1 was down 23 cents a barrel at $55.22 by 1142 GMT (6:42 a.m. ET) and U.S. light crude CLc1 fell 21 cents to $52.16.

Iron Ore Opens 2017 With a Bang After Flaying Skeptics Last Year (Bloomberg) Iron ore has carried last year’s bullish momentum into the start of 2017, with prices rallying to a two-year high amid speculation that China’s demand for overseas ore will hold up even as the world’s largest miners bring on new capacity. Ore with 62 percent content in Qingdao in China climbed 3.9 percent to $83.65 a dry metric ton, according to Metal Bulletin Ltd. The commodity has risen 6.1 percent in 2017 after surging more than 80 percent last year.

Toronto’s hot housing market spills over to condo rentals (TheGlobeAndMail) Toronto’s sizzling housing market is spilling over into the region’s rental market, pushing up rents to new records as tenants fought over a shortage of rental listings. Average rents for condos rose 11.7 per cent in the fourth quarter of 2016, compared to the same period a year earlier, hitting nearly $1,990 a month for a typical 719-square-foot condo, according to new data from Urbanation Inc., a consulting and market research firm that focuses on the Greater Toronto Area’s condo market.

China will ‘take off the gloves’ if Trump continues on Taiwan, state media warns (Reuters) China will “take off the gloves” and take strong action if U.S. President-elect Donald Trump continues to provoke Beijing over Taiwan once he assumes office, two leading state-run newspapers said on Monday. In an interview with the Wall Street Journal published on Friday, Trump said the “One China” policy was up for negotiation. China’s foreign ministry, in response, said “One China” was the foundation of China-U.S. ties and was non-negotiable.

Germany says in interests of EU and U.S. to pursue TTIP talks (Reuters) Germany still regards the TTIP EU-U.S. free-trade deal as an important project and believes it is in both European and U.S. interests to continue negotiations, government spokesman Steffen Seibert said on Monday. U.S. President-elect Donald Trump has opposed the Transatlantic Trade and Investment Partnership (TTIP).

Overnight markets

Overview: US 10yr note futures are up 0.0626% at 124-28, S&P 500 futures are down -0.19% at 2268.25, Crude oil futures are down -0.11% at $52.31, Gold futures are up 0.57% at $1203, DXY is up 0.37% at 101.55, CAD/USD is up 0.28% at 0.7604.

US Economic Data 

There is no major economic data release for today

Canadian Economic Data 

9:00 AM Existing Home Sales, m/m, Dec, (prior -5.3%)
10:00 AM Bloomberg Nanos Confidence Index, Jan 13,  (prior 56.5)

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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