Market Update

US tsys trading unch, prices fading since early NA trading on avg volume (TY 350k), 10Y 1.775%, long end outperforming slightly.  US futures higher, S&P +13, Nasdaq +60. Core EGBs mixed – UK gilts under pressure after upbeat factory survey – CBI optimism rose to 6 year high in Jan. GOCs lower ,  0.5-1bp wider vs tsys before Dec CPI & BOC decision. CPI expected to have risen 2.3% from 2.2%, with the common core measure unch at 2.4% –  the avg core measure rose to 2.17% in Nov the highest since 2009.

News headlines

U.S. Futures Gain as China Moves to Contain Virus: Markets Wrap (Bloomberg) U.S. equity-index futures gained on Wednesday as China took steps to contain the spread of a deadly virus that had rattled international markets. Treasuries and the dollar were steady.

CANADA STOCKS-TSX futures tick up ahead of BoC policy meeting, inflation data (Reuters) Futures for Canada’s main stock index edged up on Wednesday, ahead of the central bank’s interest rate decision and inflation data due later in the day.

Stephen Poloz enters home stretch hawkish on rates (BNN) Stephen Poloz is heading into the final few months of his term as Bank of Canada governor showing few signs of giving up his status as one of the industrialized world’s most hawkish central bankers.

Oil Declines on Concerns Asia Virus Could Reduce Demand (Bloomberg) Oil declined on concerns that a coronavirus outbreak in Asia could spread and curtail demand in a market that’s already contending with plentiful supplies.

Trump says will meet with WTO chief, promises ‘dramatic’ steps (Reuters) U.S. President Donald Trump on Wednesday vowed dramatic action with the World Trade Organization, saying the group’s director general would visit Washington as soon as next week, but giving no other details.

Trump says he expects to make trade deal with Europe (Reuters) U.S. President Donald Trump on Wednesday said he expects to be able to make a trade deal with Europe, but that negotiating an agreement is in many ways tougher than the trade pact he brokered with China.

PRECIOUS-Gold steadies on central bank policy expectations (Reuters) Gold was little changed on Wednesday as strong technical support on expected dovish monetary policy from global central banks offset revived appetite for riskier assets and an upbeat dollar.

With record profits on Wall Street, small bonuses will annoy bankers: experts (Reuters) Most Wall Street banks announced their fourth quarter profits beat industry expectations last week. But by the end of this week, bank sources and compensation experts told Reuters, most of their staff will be underwhelmed by their bonuses.

Market Overview: US 10yr note futures are down -0.048% at 129-17, S&P 500 futures are up 0.4% at 3332.75, Crude oil futures are down -0.87% at $57.87, Gold futures are down -0.13% at $1555.9, DXY is up 0.02% at 97.55, CAD/USD is down -0.14% at 0.7662.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.623% 2 Year 1.53%
5 Year 1.544% 5 Year 1.578%
10 Year 1.525% 10 Year 1.774%
30 Year 1.634% 30 Year 2.231%

US Economic Data

07:00 AM MBA Mortgage Applications, Jan 17 Survey: —  Actual: -1.20% Prior: 30.20%
08:30 AM Chicago Fed Nat Activity Index, Dec  Survey: 0.13  Prior: 0.56
09:00 AM FHFA House Price Index MoM, Nov  Survey: 0.30%  Prior: 0.20%
10:00 AM Existing Home Sales, Dec  Survey: 5.43m  Prior: 5.35m
     Existing Home Sales MoM, Dec  Survey: 1.50%  Prior: -1.70%

Canadian Economic Data

08:30 AM Wholesale Trade Sales MoM, Nov  Survey: -0.40%  Prior: -1.10%
       CPI NSA MoM, Dec  Survey: 0.00%  Prior: -0.10%
       CPI YoY, Dec  Survey: 2.30%  Prior: 2.20%
       Consumer Price Index, Dec  Survey: 136.4  Prior: 136.4
       New Housing Price Index MoM, Dec  Survey: 0.00%  Prior: -0.10%
       New Housing Price Index YoY, Dec  Survey: -0.10%  Prior: 0.00%
10:00 AM Bank of Canada Rate Decision, Jan 22  Survey: 1.75%  Prior: 1.75%

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230