cti2015header-morning comments web

Market update

Tsys opening higher in safe haven buying after attacks in Brussels, US 10Y 1.90 (-2bps). European stocks are ~1.0% lower, euro off slightly, US stocks futures higher. Core Euro bonds higher in led by the long end, but bunds off the highs on better than expected March IFO. Latest JPM Tsy Client Survey showed all clients holding small long position from short last week. GOCs slightly higher in line with tsys, budget later today expected to reveal $30bln+ budget deficit this yr and deficits going forward. Provis 0.5-1bp wider this morning, Quebec & Ont possible today with risk appetite still fairly high.

News headlines

  • Stocks Drop on Brussels Attack as Gold Rises With Bonds and Yen (Bloomberg) European stocks fell, while German government bonds rose with gold and the yen after explosions rocked a Brussels airport departure hall and a downtown subway station. The Stoxx Europe 600 Index fell the most in a week as the attacks caused deaths and injuries and spurred fears of imminent follow-up attacks in the capital of the European Union. Travel and leisure shares led the slide and futures on the Standard & Poor’s 500 Index also declined. The yield on 10-year bunds touched the lowest in almost two weeks, while gold gained for the first time in four days as investors sought the safest assets. The pound dropped against all its major peers amid speculation the blasts may boost the case for Britain leaving the European Union.
  • Oil market rattled by deadly Brussels blasts (Reuters)  Oil prices seesawed on Tuesday, rattled by investor nervousness after deadly blasts in Brussels prompted a flight towards so-called safe-haven assets such as gold.
  • Trudeau Will Push Canada Into the Red With `Unsexy’ Debut Budget (Bloomberg) Prime Minister Justin Trudeau will put the Canadian government back in business when he introduces a debut budget Tuesday that reverses a decade of restraint. Trudeau, whose popularity has swelled since his majority victory in October’s election, will push the country deeper into deficit as it grapples with sluggish economic growth. The shortfall will finance new benefits for families and what the Liberal prime minister bills as “unsexy” infrastructure spending, among other programs.
  • Libya won’t attend April oil meeting, wants to boost output: source (Reuters) OPEC member Libya does not plan to attend an April 17 oil producer meeting about freezing production to support prices because it wants to increase output when the situation allows, a Libyan OPEC delegate said.
  • Japan Land Prices Rise for the First Time Since 2007 on Tourism (Bloomberg) Japan’s land prices rose for the first time in eight years in 2015 after low mortgage rates encouraged home purchasing and a booming tourism market lifted values for retail space and hotels. Nationwide land prices on average gained 0.1 percent, compared with a 0.3 percent decline a year earlier, the Ministry of Land, Infrastructure and Transport said Tuesday.
  • German Manufacturing Grew at Slowest Pace in 16 Months in March (Bloomberg) German manufacturing grew at the slowest pace in 16 months in March, evidence that the economy is feeling the pressure of cooling global demand. Markit Economics said its Purchasing Managers Index slipped to 50.4 from 50.5 in February, just above the 50 level that separates expansion from contraction. While a separate report showed services improved this month, a gauge of new business across both sectors declined to the lowest in eight months.
  • Russia Deals Deepen India Hold in China Oil-Buying Backyard (Bloomberg) India is expanding its footprint in China’s backyard by forging deals with Russia for stakes in Siberian fields that supply Asia’s biggest economy and crude consumer. Deals last week between Rosneft and Indian state-run companies beefed up the South Asian nation’s share in two assets that are linked to the East Siberia-Pacific Ocean pipeline
  • French Economy Picks Up, Remains ‘Sluggish,’ Markit Says (Bloomberg) France’s economy showed signs of a limited pickup at the end of the first quarter as services expanded at the fastest pace in five months. Markit Economics said its services Purchasing Managers Index rose to 51.2 in March from 49.2 in February, moving back above the 50 level that separates expansion from contraction.
  • K. Inflation Rate Remains at 0.3%, Far Below BOE’s Target (Bloomberg) The U.K.’s inflation rate was unexpectedly unchanged in February, remaining far below the Bank of England’s 2 percent goal. Annual consumer-price growth was at 0.3 percent, the Office for National Statistics said in London on Tuesday. Economists had forecast an acceleration to 0.4 percent. Core inflation, which excludes volatile food and energy prices, held at 1.2 percent.

 Overnight markets

  • Overview: US 10yr note futures are up 0.1211% at 129-6, S&P 500 futures are down -0.38% at 2035, Crude oil futures are down -0.63% at $41.26, Gold futures are up 0.88% at $1255.2, DXY is up 0.24% at 95.517.

US Economic Data 

  • FHFA House Price Index MoM variation will be released at 9:00 AM
  • Markit US Manufacturing PMI will be released at 9:45 AM
  • Richmond Fed Manufacturing Index will be released at 10:00 AM

 Canadian Economic Data 

  • Federal Budget will be released at 4:00 PM



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