Market Update

Tsys higher, yields 1bp lower with the 10Y 2.41 after dipping below 2.40 on heavy volume in TY futures (430k), Carry over from risk off  yest with S&P futures lower after Tuesday’s big declines. Uncertainty over Thursday’s health care vote , French election and N. Korea al factors supporting bid in tsys. EGBs higher, bund/gilt yields 2-5bps lower -yesterday’s tsy rally brought the 10Y tsy/bund spd to four month lows 195bps. GOCs higher in line with tsys after giving up ~3bps in 5s yest, thou 10s & longs have barely cheapened on x-mkt basis despite strong eco no.s. Provis 0.5bps wider yest on no issuance, Alta/Ont46 roll ~5bps wider since budget last week. 407 priced 250MM 16 yr bonds yest which broke 2-3bps tighter.

News headlines 

U.S. stock futures slip as concerns mount over delays to Trump tax cuts (Reuters) U.S. stock index futures were lower on Wednesday as investors sought safe haven assets, a day after Wall Street posted its biggest one-day fall since the November election. Investors are becoming increasingly worried about the ability of President Donald Trump to deliver on his campaign promises of cutting taxes.

Canada’s New Infrastructure Bank Seeks to Clear Billions in Backlogs (Bloomberg) Infrastructure is Canadian Prime Minister Justin Trudeau’s biggest spending commitment. But he needs help. Canada is preparing to launch a government infrastructure bank to spur development of projects across the country, from roads to subways, by drawing in private capital from pension funds and other institutional investors. To do it, Trudeau will directly subsidize some projects, and agree to take a back-seat stake in others.

Oil prices hit three-month low on expanding U.S. inventories (Reuters) Oil prices slipped to three-month lows on Wednesday after data showed U.S. crude inventories rising faster than expected, piling pressure on OPEC to extend output cuts beyond June. A deal between the Organization of the Petroleum Exporting Countries and some non-OPEC producers to reduce output by 1.8 million barrels per day (bpd) in the first half of 2017 has had little impact on bulging global stockpiles of oil.

Trudeau to Make Case That Growth and Redistribution Can Coexist (Bloomberg) Prime Minister Justin Trudeau will try to convince Canadians he’s just as good at generating growth as he is at handing out checks. Bill Morneau, his finance minister, releases a budget at 4 p.m. Ottawa time that will address the country’s lackluster economic performance, and will lay out how the Liberals, who came to power in late 2015, intend to accelerate infrastructure spending and drive innovation.

Surging sales of $1-million-plus Toronto homes fuel calls for new measures (TheGlobeAndMail) Sales of single-family detached houses commanding prices of at least $1-million have almost doubled this year in the Greater Toronto Area, as economists raise the spectre of a real estate bubble. The GTA saw 2,876 sales of detached properties of $1-million or more in January and February, compared with 1,548 in the first two months of 2016, a new study by Sotheby’s International Realty Canada shows.

Amaya’s profit beats on lower costs (TheGlobeAndMail) Canada’s Amaya Inc , owner of online gambling sites PokerStars and Full Tilt, reported fourth-quarter profit ahead of estimates as it added more customers and cut costs. Amaya said it expects adjusted profit of $1.94-$2.13 per share in 2017, higher than the $1.88 per share it earned last year.

Overnight markets 

Overview: US 10yr note futures are up 0.138% at 124-15, S&P 500 futures are down -0.09% at 2340.25, Crude oil futures are down -1.45% at $47.54, Gold futures are up 0.06% at $1247.2, DXY is up 0.04% at 99.849, CAD/USD is up 0.24% at 0.7472.

US Economic Data

7:00 AM MBA mortgage Applications, Mar 17, -2.7% (prior 3.1%)
9:00 AM FHFA House Price Index, m/m, Jan, est. 0.4% (prior 0.4%)
10:00 AM Existing Home Sales, Feb, est. 5.55m (prior 5.69m)
Existing Home Sales, m/m, Feb, est. -2.5% (prior 3.3%)

Canadian Economic Data

4:00 PM Finance Minister Bill Morneau Introduces Federal Budget.


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