Market Update Tsys trade weaker, near overnight lows on avg volume in TY futures (240k), 10Y 2.87 (+1bp). USD recovering from earlier slide vs yen on BOJ deputy comments that they could adjust rates before inflation hit 2%, reports Trump to announce $60bln of import tariffs on China weighing on tsys, core EGBS. Gilts lower, despite weaker Feb CPI – 2.7% from 3.0% in Jan, mkt reacting more to Brexit transition and US tarrifs. GOCs lower, outperforming tsys by 1-1.5bps, Jan Wholesale Trade rose 0.1% vs 0.0% exp. Provis fairly rangebound, Ont 27s 59.5/59.
News headlines
China Pledges Action on Tech Transfer as Trump Plans Tariffs (Bloomberg) China made further promises to protect the intellectual property of foreigners investing in its economy, addressing a long-standing grievance as U.S. President Donald Trump plans new tariffs aimed at Beijing. Speaking Tuesday at the end of the annual National People’s Congress, Premier Li Keqiang said that China wants to avoid a trade war and that the government plans to further open the manufacturing sector — and that it won’t force foreign companies to transfer technology to domestic ones while doing so.
Disputes Stall Work on $1.2 Trillion Spending Bill in Congress (Bloomberg) Republican attempts to cobble together a comprehensive $1.2 trillion spending bill stalled late Monday, pushing House and Senate votes on the package closer to a deadline at the end of the work week to keep the government operating. Lawmakers, who’ve had a month to work out the details of a budget agreement aimed at ending a cycle of stopgap measures, blew past another target to finish their work as disagreements persisted over immigration, border security, tax breaks and a tunnel under the Hudson River between New York and New Jersey.
How Facebook Made Its Cambridge Analytica Data Crisis Even Worse (Bloomberg) Facebook Inc. tried to get ahead of its latest media firestorm. Instead, it helped create one. The company knew ahead of time that on Saturday, the New York Times and The Guardian’s Observer would issue bombshell reports that the data firm that helped Donald Trump win the presidency had accessed and retained information on 50 million Facebook users without their permission.
Bond Traders’ March Fed Guide: Beware the Four-Hike Hype So Soon (Bloomberg) For a Federal Reserve meeting at which an interest-rate hike is virtually guaranteed, the decision still holds plenty of market-moving potential for bond traders. That’s because new Federal Reserve Chairman Jerome Powell gave markets the impression last month that he’s open to tightening four times in 2018, rather than the three currently reflected in policy makers’ “dot plot” projections. Officials will update those forecasts this week, and Powell will hold a press conference, after his February signals encouraged a fresh round of U.S. yield-curve flattening.
Stocks Seek to Shrug Off Tech Woes; Dollar Climbs: Markets Wrap (Bloomberg) European stocks swung from a gain to a loss and back again and Asian equities nudged lower as investors sought to put the technology selloff behind them before a series of potentially market-moving events this week. The dollar rose with Treasury yields and the pound erased an advance. Trading was mixed and muted in equities across both Europe and Asia following Monday’s selloff, which was sparked by a series of negative tech stories including Facebook Inc.’s data issues and a fatal accident involving an Uber Technologies Inc. self-driving car. Still, both the European gauge and U.S. stock futures reversed declines, and contracts for the Nasdaq 100 eventually edged higher. Metals were once again under pressure, but Bloomberg’s broader index of raw materials increased.
Canada’s Trudeau says will discuss U.S. steel tariffs at Group of 7 meeting: Seoul (Reuters) Canada’s Prime Minister Justin Trudeau said steel tariffs will be discussed at the upcoming Group of 7 summit in June, South Korea’s presidential office said on Tuesday after Trudeau had a phone call with South Korean President Moon Jae-in. Trudeau was cited as saying Canada had been granted a temporary waiver on U.S. steel import tariffs and does not believe trade issues involving the United States have been resolved yet, the Blue House said.
Budget watchdog calls out Liberals for lack of details in budget plans (BNN) Parliament’s spending watchdog urged the federal government to come clean Thursday on billions of dollars’ worth of expenditure outlined in last month’s budget that includes little or no explanation — be it on infrastructure, programs for Canadians or the military. The Liberal government’s third budget, tabled late last month, showed billions in planned infrastructure spending was being shifted to future years. The document also showed declines in program spending totalling about $16 billion over six years, thereby reducing the government’s bottom line.
Overnight markets
Overview: US 10yr note futures are down -0.169% at 120-06, S&P 500 futures are up 0.16% at 2727, Crude oil futures are up 1.24% at $62.83, Gold futures are down -0.51% at $1311.1, DXY is up 0.46% at 90.18, CAD/USD is up 0.08% at 0.7641.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.785% | 2 Year | 2.318% |
| 5 Year | 2.014% | 5 Year | 2.664% |
| 10 Year | 2.173% | 10 Year | 2.868% |
| 30 Year | 2.309% | 30 Year | 3.103% |
US Economic Data
There is no US economic data for today.
Canadian Economic Data
| 8:30 AM | Wholesale Trade Sales MoM, Jan 0.1% est 0.0% (-0.5% prior) |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230