Market Update
US Tsys prices open NY mixed after overnight range then creep higher in price since about six am ET, then recent profit-taking; cash 10Y note is at 2.530%, vs. recent low yield notched at 2.517%. More Tsys pressure rate-hike rhetoric from ECB’s Nowotny. Mix of supply-tied hedging and position squaring ahead into wknd saw rates inch slowly off lows. US swaps now steady to marginally mixed; after overnight light 2Y, 5Y paying, likely supply tied; also fast money 5/5Y receiving and deal-tied long end receiving. Asian equity markets saw little in the way of firm direction as markets took a breather after recent key risk events. OPEC may extend oil-supply cuts if stockpiles stay above the five-year average, Saudi Energy Minister Khalid Al-Falih told Bloomberg TV this morning. U.S. Treasury Secretary Steven Mnuchin and his German counterpart Wolfgang Schaeuble, Mnuchin heads to the Black Forest town of Baden-Baden for the G-20 finance ministers’ meeting. President Donald Trump also meets with Chancellor Angela Merkel in Washington today.
News headlines
Emerging Stocks Shine Even as Global Rally Eases: Markets Wrap (Bloomberg) Emerging markets headed toward the best week in eight months even as the global equities rally spurred by the Federal Reserve’s outlook lost momentum. The dollar was poised for its biggest weekly loss since February.
Oil Set for Weekly Gain as Saudis Say Willing to Extend Curbs (Bloomberg) Oil headed for a weekly increase as U.S. stockpiles retreated from record levels while Saudi Arabia said it’s prepared to continue production curbs in the second half of the year. Futures were little changed in New York, up 0.9 percent for the week. U.S. inventories last week fell for the first time this year, according to Energy Information Administration data on Wednesday.
G20 finance heads to repeat FX assurances, no deal yet on rejecting protectionism (Reuters) The world’s financial leaders will renounce competitive devaluations and warn against exchange rate volatility, but they have not yet found a common stance on trade and protectionism, a draft statement of their meeting in Germany showed on Friday.
Carney Warns of Balkanization Risk in Global Financial Markets (Bloomberg) Mark Carney, head of the Financial Stability Board, warned against giving in to “reform fatigue” a decade after the financial crisis, and called on the Group of 20 nations to strengthen regulatory cooperation.
Germany, U.S. risk worsening trade ties: business chamber (Reuters) Germany and the United States must work hard to prevent a deterioration of trade relations between the two countries, the head of the American Chamber of Commerce in Germany said on Friday.
Alberta digs deeper into deficit with budget that bets on oil rebound, pipelines (TheGlobeAndMail) The Alberta government expects to more than double its debt over the next three years and run deficits for six years, all while counting on rising oil prices and unbuilt pipelines to rescue the province’s finances.
Overnight markets
Overview: US 10yr note futures are down 0% at 123-19, S&P 500 futures are up 0.08% at 2381, Crude oil futures are up 0.45% at $48.97, Gold futures are up 0.2% at $1229.5, DXY is down -0.02% at 100.34, CAD/USD is up 0.03% at 0.7506.
US Economic Data
| 9:15 AM | Industrial Production, m/m, Feb, est. -0.3% (prior 2.3%) |
| Capacity Utilization, Feb, est. 0.2% (prior -0.3%) | |
| Manufacturing Production, Feb, est. 0.5% (prior 0.2%) | |
| 10:00 AM | University of Michigan Sentiment, Mar P, 97.0 (prior 96.3) |
| Leading Index, Feb, est. 0.5% (prior 0.6%) | |
| 03 / 17-20 | Labor Market Conditions Index, Feb, est. 2.5 (prior 1.3) |
Canadian Economic Data
| 8:30 AM | Manufacturing Sales, m/m, Jan, est. -0.3% (prior 2.3%) |
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