Market Update
Tsys moving higher on avg volume (350k TY), 10Y 2.71% (-0.5bps), tsy curve 0.5bps flatter 2s30s, ‘risk off’ after Morgan Stanley Q4 earning miss, shares down 4% pre-mkt equities lower. Tsys off the highs after strong Jan Phili Fed – 17 vs 9.5 exp. Equity futures paring earlier losses S&P -5 from -15 pre data, Euro stocks down ~0.50%. GOCs higher, outperforming tsys by 0.5-1.5bps, 10Y 1.975 (-2bps), Mar24/5Y roll unch 0.7bps after yesterday’s 5Y auction. Provis opening 0.5bps wider, Ont 28 83.5 , Ont 48/28 roll unch 13.5/13.
News headlines
Trudeau’s U.S. envoy confident on new NAFTA passage, tariff relief (BNN) Canada’s ambassador to Washington is confident that the U.S. will both pass the revised North American trade deal and lift tariffs on steel and aluminum.
Shutdown is starting to hurt Trump’s financial deregulation agenda (Reuters) The U.S. government shutdown over President Donald Trump’s call for Congress to fund a wall he promised to build on the U.S.- Mexican border is threatening another campaign pledge to make rules easier to navigate for banks and corporations.
Stocks turn red, pound finds some peace (Reuters) Concern over China’s economic outlook and possible U.S. tariffs on European cars dragged stocks lower on Thursday, while an anti-climactic end to the latest chapter in the Brexit saga offered sterling a moment’s peace.
‘Pretty impressive’: TSX bounces back amid nine-day winning streak (BNN) All of a sudden, Canada is sporting one of the best-performing stock exchanges in the world. The S&P/TSX Composite Index heads into Thursday’s trading session riding a nine-day winning streak. Over that period, Canadian stocks have climbed more than six per cent.
Riven by crisis, UK searches for Brexit emergency ‘plan B’ (Reuters) Prime Minister Theresa May will try on Thursday to break the impasse in Britain’s political elite over how to leave the European Union by searching for an emergency exit deal, though there is so far little sign of compromise.
U.S. Futures Slip With European Stocks; Oil Drops: Markets Wrap (Bloomberg) U.S. equity futures and European shares fell on Thursday following a mixed session in Asia amid concerns about rising tension between America and China and after weak bank earnings. The dollar was steady and Treasuries edged higher.
Feud with Canada ‘not good’ for corporate China: Ambassador (BNN) Canada’s ambassador to China warned that the spiraling diplomatic feud between the nations was damaging Beijing’s reputation, as the U.S. joined countries criticizing a Canadian citizen’s death sentence as “politically motivated.”
China Quietly Cuts Borrowing Costs While Keeping Rates on Hold (Bloomberg) The People’s Bank of China has been quietly guiding interbank borrowing costs down without actually cutting official interest rates, with the latest move a record one-day injection of cash into the market.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.908% | 2 Year | 2.529% |
| 5 Year | 1.922% | 5 Year | 2.529% |
| 10 Year | 1.985% | 10 Year | 2.711% |
| 30 Year | 2.209% | 30 Year | 3.056% |
US Economic Data
| 8:30 AM | Philadelphia Fed Business Outlook, Jan surv 9.5 actual 17.0 prior 9.4 |
| Initial Jobless Claims, Jan 12 surv 220K actual 213K prior 216K | |
| Continuing claims, Jan 5 surv 1734K actual 1737K prior 1722K | |
| Bloomberg Consumer Comfort, Jan 13 Prior 58.5 |
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