cti2015header-morning comments web

Market Update

US tsys lower, prices at overnite lows on heavy volume in TY futures(488k), Us 10Y 2.456(+4.,1bps). Fed Harker saying would not rule out March rate hike if PCE warranted it in interview with MNI. Core Euro bonds sharply lower, yields 2-3bps higher after strong EU PMI . French yields another 3-7bps higher led by the 5-8 yr sector as Len Pen continues to gain in the polls. GOCs lower , curve 2bps steeper as 10s underperform,  GOC 10Y 1.75 (+4.4bps). Provis unch from Friday when spreads closed ~1bp wider, 10Y Ont @78 bps. Corps well bid, new issues from last week (BIP, Ford, Enercare) all significantly tighter. We continue to see good demand for ‘high beta’ product  – reits, BBB energy (CNQ, Veresen).

News headlines

Stock futures hit record highs amid retail earnings (Reuters) U.S. stock index futures rose to record intraday highs on Tuesday as oil prices surged and investors assessed earnings from top U.S. retailers.

OPEC aims for higher compliance, sees 2017 stock fall (Reuters) OPEC countries are aiming to boost compliance with agreed oil output curbs further from January’s high levels in a bid to clear a supply glut that has weighed on prices, the group’s secretary general said on Tuesday.

Euro-Area Economic Recovery Broadens as France Outpaces Germany (Bloomberg) The euro area’s unexpectedly upbeat economic data on Tuesday might have come with more than one positive message. A gauge for economic activity rose to the highest level in almost six years in February, following previous signals that the region’s frail recovery is finally taking shape. National gauges showed France outpacing Germany for the first time since 2012 — a development that could signal growth in the 19-nation region is becoming more broad-based.

Sterling subdued ahead of Bank of England team’s testimony (Reuters) Sterling fell against the dollar but made ground versus the euro on Tuesday, before Bank of England Governor Mark Carney and a number of his chief lieutenants testify in Britain’s parliament.

Japan February flash manufacturing PMI shows expansion at three-year high (Reuters) Japanese manufacturing activity expanded in February at the fastest pace in almost three years, a preliminary survey showed on Tuesday, a sign that domestic and overseas demand is improving. The Markit/Nikkei Flash Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 53.5 in February from a final 52.7 in January.

Big Six banks’ earnings results to get a lift from hot markets (TheGlobeAndMail) The Big Six begin reporting their fiscal first-quarter earnings this week, launching into 2017 with a decidedly more hopeful outlook. At this time last year, oil prices had plunged to rock-bottom levels near $30 (U.S.) a barrel, leaving portfolios of energy-related loans mired in uncertainty. And that was before Britain decided to leave the European Union and U.S. voters placed Donald Trump in the White House.

Overnight markets 

Overview: US 10yr note futures are down -0.1879% at 124-15, S&P 500 futures are up 0.21% at 2353, Crude oil futures are up 1.87% at $54.4, Gold futures are down -0.82% at $1229, DXY is up 0.57% at 101.53, CAD/USD is up 0.32% at 0.7606.

US Economic Data

9:45 AM Markit US Manufacturing PMI, Feb P, est. 55.3 (prior 55.0)
  Markit US Services PMI, Feb  P, 55.8 (prior 55.6)
  Markit US Composite PMI, Feb P, (prior 55.8)

Canadian Economic Data

10:00 AM Bloomberg Nanos Confidence, Feb 17th, (prior 57.3)


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