cti2015header-morning comments web

Market update

US tsys trading lower in spillover from yesterday’s risk on rally post Draghi, US 10Y 2.06 (+2.7bps), curve ~1bp flatter. Nikkei up 5.9% as expectations build for further BOJ stimulus – the JPY lower for a second day. US tsys rebounded somewhat in Europe with bunds as European data weak incl EZ PMIs, UK retail sales… GOCs lower, extending underpeformance vs tsys after stronger Dec Retail Sales even as core CPI weaker (-0.4% vs -0.3% exp). Cad continuing its march higher , up 0.64% @ 1.4174 with crude above $31. Provis saw saolid sponsorship yest despite long Man supply, and spds are in another 2bps this morn. Could expect supply after a relatively quiet two weeks, Ontario a strong candidate.

News headlines

  • US Is Hiding Treasury Bond Data That’s Suddenly Become Crucial (Bloomberg) It’s a secret of the vast U.S. Treasury market, a holdover from an age of oil shortages and mighty petrodollars: Just how much of America’s debt does Saudi Arabia own? But now that question — unanswered since the 1970s, under an unusual blackout by the U.S. Treasury Department — has come to the fore as Saudi Arabia is pressured by plunging oil prices and costly wars in the Middle East.
  • Canadian dollar rallies as oil price climbs (Globe and Mail) The Canadian dollar strengthened the most in 10 months as crude-oil prices rose following signals the European Central Bank may take further measures to stimulate that region’s economy.
  • Stocks, oil jump as Draghi the dove tame global bears (Reuters) Stocks and oil, at the forefront of a global market rout since the turn of the year, rebounded strongly on Friday thanks to hints of more monetary policy support by the European Central Bank and bargain-hunting by bruised investors. World stocks recorded their biggest rise in a month, and Asian stocks had their best day in three months. Oil rallied 6 percent, after gaining 5 percent on Thursday, recovering from 12-year lows to go back above $30 a barrel.
  • Argentina’s Macri hopes for creditor deal early in 2016 (Reuters) Argentine President Mauricio Macri said on Friday that talks with U.S. creditors in a long-running legal battle over unpaid debts had not made much progress, although he hoped to reach a settlement early this year. « We want to reach a settlement, find a fair agreement, » Macri told Reuters on the sidelines of the World Economic Forum in Davos, adding that he hoped to reach a deal « this year, early this year ».
  • Global Markets Continue to Rally as Investors Seek Bargains (NY Times) Surging Japanese shares led a strong rebound in markets across Asia on Friday, and Europe had its second consecutive day of gains, as investors buffeted by days of volatility saw opportunity amid the recent sell-offs.


Overnight markets

  • Overview: US 10yr note futures are down -0.25% at 128-11, S&P 500 futures are up +1.57% at 1890.25, Crude oil futures are up  5.45%% at 31.14$, Gold futures are down -0.16% at $1096.40, DXY is up +0.30% at 99.356.

US Economic Data

  • December Chicago Fed National Activity Index narrowed to -0.22 from the revised -0.36 the previous month. The index was expected to come in at at -0.5.
  • Markit will release its flash US manufacturing PMI for January at 9h45am
  • US existing home sales are likely to bounce back to ‘normal’ after a 10% (MoM, sa) collapse in November wasn’t corroborated by any of the other housing data. Data will be released later today at 10ham

Canadian Economic Data

  • Retail Sales came in at 1.7%, better than expected and up from last month’s 0.1%. The analysts were expecting a growth of 0.2% this month.
  • Auto Retail Sales came in at 1.1% better than expected and up from last month’s : 0% growth . Expectations were for a growth of 0.4%.
  • Consumer Price Index (CPI) number came in at 1.6% missing the estimate by 0.1% and up by 0.3% from last year’s number.


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