Market Update
US tsys trading mixed, short end higher while the long end steepened around the 10Y (1.825% + 1.5bps), late yesterday the US treasury announced it will issue a new 20Y bond in the first half of the year. Prices of the best levels after Dec Housing Starts jumped to 1608k or 16.9% m/m vs 1.1% exp. US equity futures higher, S&P +7.75, Nasdaq +34, while crude is up for a second day 58.80. Disappointing UK Retail Sales supporting gilts, which have rallied led by the short end , and in the wake of weak Dec CPI and dovish BOE comments. German bunds mixed, focus shifts to ECB meeting next week. GOCs unch, 10Y 1.55%. Yesterday Cdn Western Bank issued $300mln 5Y dep notes @ 104 also way oversubscribed
News headlines
U.S. Futures Rise With Stocks; Dollar Edges Higher: Markets Wrap (Bloomberg) U.S. equity futures ground higher on Friday alongside stocks globally as a solid start to the American earnings season, easing trade tensions and mostly promising economic data all combined to prop up sentiment. The dollar edged upward.
CANADA STOCKS-TSX futures rise on promising China data (Reuters) Futures for Canada’s main stock index rose on Friday after Chinese data suggested that the world’s second-biggest economy was stabilizing.
Oil Near $59 as Trade Deal Hopes Jostle With Ample Supply (Bloomberg) Oil was near $59 a barrel in New York after rising the most in almost two weeks as the U.S. and China signed a trade agreement, though remains capped by signs that supplies remain plentiful.
The yield curve’s still weird. Fed’s Bullard is okay with that (Reuters) It was more than a year ago when St. Louis Federal Reserve bank President James Bullard started raising the alarm about a U.S. bond market where interest rates seemed to show investors losing faith in the economy, a risky environment for the Fed to carry out planned rate increases.
China posts weakest growth in 29 years as trade war bites, but ends 2019 on better note (Reuters) China’s economic growth cooled to its weakest in nearly 30 years in 2019 amid a bruising trade war with the United States, and more stimulus is expected this year as Beijing tries to boost sluggish investment and demand.
UK consumers cut back on spending again, adding to economic gloom (Reuters) British consumers failed to increase their spending for a record fifth month in a row in December, adding to signs of economic weakening that might prompt the Bank of England to cut interest rates this month.
Frustrated Lebanese depositors turn rage on crisis-hit banks (Reuters) As cash runs short at Lebanon’s banks, so has the patience of depositors. Hit by restrictions on withdrawals, some are taking extreme steps, occupying branches and in one case taking an employee hostage, to squeeze what they can from their accounts.
China’s economy grew 6% in fourth quarter as demand stabilized (BNN) China’s economy stabilized last quarter after slowing to the weakest pace in almost three decades, with the first acceleration in investment since June signaling that a firmer recovery could be underway.
World shares gain as China data fuels bets on growth (Reuters) World shares rose to record highs on Friday, buoyed by Chinese growth figures that suggested the world’s second-biggest economy was stabilizing.
Market Overview: US 10yr note futures are up 0.036% at 129-07, S&P 500 futures are up 0.24% at 3324.5, Crude oil futures are up 0.29% at $58.69, Gold futures are up 0.58% at $1559.5, DXY is up 0.15% at 97.463, CAD/USD is up 0.07% at 0.7663.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.644% | 2 Year | 1.551% |
| 5 Year | 1.569% | 5 Year | 1.613% |
| 10 Year | 1.556% | 10 Year | 1.815% |
| 30 Year | 1.687% | 30 Year | 2.276% |
US Economic Data
| 08:30 AM | Housing Starts, Dec 1608K Survey: 1380k Prior: 1365k |
| Housing Starts MoM, Dec 16.9% Survey: 1.10% Prior: 3.20% | |
| Building Permits, Dec 1416K Survey: 1460k Prior: 1482k | |
| Building Permits MoM, Dec -3.9% Survey: -1.50% Prior: 1.40% | |
| 09:15 AM | Industrial Production MoM, Dec Survey: -0.20% Prior: 1.10% |
| Capacity Utilization, Dec Survey: 77.00% Prior: 77.30% | |
| 10:00 AM | U. of Mich. Sentiment, Jan P Survey: 99.3 Prior: 99.3 |
| JOLTS Job Openings, Nov Survey: 7250 Prior: 7267 |
Canadian Economic Data
| 08:30 AM | Int’l Securities Transactions, Nov -1.75b Survey: — Prior: 11.32b |
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