Market Update
Tsys trading slightly lower, yields 0.5bps higher across the curve, US 10Y 2.50%. Low volume in Ty futures as Japan mkt closed for holiday. Volume picked up after 7:30 on news UK will trigger article 50/Brexit talks. The GBP slid on the news, UK gilts off the lows yet yields still ~1.5bps higher. Very strong bid at the front end of the Spain & Italy curves on hopes ECB buying/TLTRO. GOCs lower, 1bp wider vs tsys, mkt awaits Wednesday’s budget announcement. Provis closed weaker Friday, spds ~1bp wider. Expectations are for Ont & Alberta 10Y this week.
News headlines
Oil Weighs on Europe Stocks as Dollar Pares Drop: Markets Wrap (Bloomberg) Weaker oil prices helped drag European shares lower while a gauge of the U.S. dollar flirted with its longest losing streak since Donald Trump won the election. The yield on 10-year U.S. Treasuries steadied after Friday’s decline to the lowest in two weeks.
U.K. to Trigger Brexit on March 29, May’s Spokesman Says (Bloomberg) The U.K. will officially begin divorce proceedings with the European Union on March 29, Prime Minister Theresa May’s spokesman said, ending months of media speculation over the precise date.
China prepares to counter any U.S. trade penalties: sources (Reuters) China’s government has been seeking advice from its think-tanks and policy advisers on how to counter potential trade penalties from U.S. President Donald Trump, getting ready for the worst, even as they hope for business-like negotiations.
G20 ministers give Mnuchin space to define Trump trade agenda (Reuters) Wary of their first official encounter with U.S. President Donald Trump’s blustery trade agenda, the world’s top finance officials were relieved to find new Treasury Secretary Steven Mnuchin polite and business-like over the weekend.
Trump’s ‘America first’ agenda raises the spectre of inflation (TheGlobeAndMail) U.S. President Donald Trump has promised to put American workers first. But he could end up hurting American consumers in the process. Mr. Trump’s proposals on trade, taxes and infrastructure risk hitting Americans in the pocketbook though higher prices, say investors and economists. And that may set off a struggle with the Federal Reserve over the future of the U.S. economy.
Canada’s oilpatch is on the prowl for deals again after the long, dark years of the oil rout (Financial Post) Dealmakers in the oilpatch are preparing for more mergers and acquisitions this year, as embattled oil and gas producers emerge from a prolonged commodity price rout, start selling more assets and rejig their portfolios.
Overnight markets
Overview: US 10yr note futures are up 0.013% at 123-25, S&P 500 futures are down -0.19% at 2370.75, Crude oil futures are down -1.85% at $47.88, Gold futures are up 0.13% at $1231.8, DXY is down -0.01% at 100.29, CAD/USD is up 0.11% at 0.7481.
US Economic Data
| 8:30 AM | Chicago Fed Nat Activity Index, Feb, 0.34 , est. 0.03 (prior -0.05, revised 0.3%) |
Canadian Economic Data
| 8:30 AM | Wholesale Trade Sales, m/m, Jan, 0.34, est. 0.5% (prior 0.7%, revised 0.3%) |
| 10:00 AM | Bloomberg Nanos Confidence Index, Mar 17, (prior 58.2) |
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.
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