cti2015header-morning comments web

Market Update

US tsys moving  sharply higher, yields 2-4 bps lower with the US 10Y @ 2.40% (-4.6bps) and the curve 2bps flatter., brisk buying starting in Asia according to MNI,  heavy volume in TY futures (485k ).   Core Euro bonds also higher, flatter, peripherals wider on fears of a Le Pen victory in the French election. GOCs higher, underperforming the rally in the US across the curve. The Cdn bond market closes early in front of the holiday Monday. Provis softer in risk off environment, supply unlikely given early close.

News headlines 

Stocks Decline With Commodities as Pound Slumps: Markets Wrap (Bloomberg) European stocks dropped for a second day as commodity producers tracked declines in oil and metal prices, while the pound weakened after a report showed U.K. retail sales fell in January. French bonds retreated and the euro weakened after two left-wing presidential hopefuls discussed a potential single candidacy that would bring about a showdown with Marine le Pen’s anti-euro National Front. A gauge of commodities headed for the lowest close in more than a week, dragged down by industrial metals which were hurt by signs of tightening liquidity in top consumer China. The pound headed for the lowest level in a month.

Oil prices slip as high stocks overshadow OPEC cuts (Reuters) Oil slipped on Friday, pressured by growing global stocks, while expectations that an oil output cut by producers might eventually balance the market helped to underpin prices. Brent crude futures were trading at $55.57 per barrel at 0945 GMT, 8 cents below their last close. U.S. West Texas Intermediate (WTI) crude futures were down 4 cents at $53.32 per barrel.

Likely sixth loss in eight weeks weakens faith in dollar rally (Reuters) The dollar was stuck near a one-week low against a basket of currencies on Friday after upbeat economic data failed to lift Treasury yields, with concerns about policy under president Donald Trump quelling hopes of a new rally in the currency.

Carney, Wrong on Brexit, May Have Called Consumer Collapse Right (Bloomberg) The U.K. consumer finally appears to be cracking — potentially taking Britain’s economic strength with it. Retail sales unexpectedly fell for a third month in January, calling into question the key component of the economy’s recent momentum. The decline left both the three-month and annual rates of growth at the slowest in more than three years.

Air Canada posts bigger quarterly loss as fuel costs rise (GlobeAndMail) Air Canada reported a bigger quarterly loss as the airline cut fares to fill seats in long-haul leisure markets. Load factor, which measures how effectively the airline filled seats, fell to 79.9 per cent in the fourth quarter ended Dec. 31 from 81.1 per cent a year earlier.

Enbridge to invest $1.7-billion in German utility’s North Sea wind farm (GlobeAndMail) Canadian energy infrastructure group Enbridge Inc has bought a 49.9 per cent stake in EnBW’s 1.8 billion euro ($1.9-billion) North Sea offshore park Hohe See, EnBW said on Friday.

Overnight markets 

Overview: US 10yr note futures are up 0.3013% at 124-27, S&P 500 futures are down -0.25% at 2339.75, Crude oil futures are down -0.56% at $53.06, Gold futures are up 0.21% at $1244.2, DXY is up 0.17% at 100.61, CAD/USD is up 0.16% at 0.7639.

US Economic Data

10:00 AM Leading Index, Jan, est. 0.5% (prior 0.5%)

Canadian Economic Data

8:30 AM Int’l Securities Transactions, Dec, 10.23b (prior 7.24b, revised 7.26b)


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