Market Update

Tsys higher led by the long end of the curve, 10Y below 1.75% for the first time since Dec 3rd, US equity futures lower (S&P -0.19%).  Core EGBs also higher, no change in monetary policy by ECB as exp, bond buying will continue.  German bunds flatter with 2s30s 1.5bps narrower, 10Y bund -0.28% at two week low.  GOCs higher in line with tsys, Can/US 5-7bps tighter post dovish BOC yesterday, 10Y 1.41% is ~17bps lower on the week, lowest since late Oct. Expect provi supply to pick up again, particularly at these all in yield levels, HQ rumoured.

News headlines

Stocks Slip, Bonds Climb on Virus Fears; Oil Drops: Markets Wrap (Bloomberg) U.S. equity futures fluctuated while European stocks edged lower and Asian shares slumped on Thursday amid lingering concerns that a virus spreading from China to other countries could become a drag on global growth. Treasuries climbed and crude oil fell.

TSX futures edge up as dovish BoC stance offsets lower oil prices (Reuters) Canada’s main stock index futures rose slightly on Thursday, as dovish comments by the Bank of Canada at its policy announcement offset lower oil prices.

Oil Falls to Seven-Week Low as Asia Virus Eclipses Supply Loss (Bloomberg) Oil fell further after hitting a seven-week low on speculation that China’s coronavirus outbreak may dent demand, just as the market already contends with plentiful supplies.

Virus fears sap stocks; ECB gets ready for rethink (Reuters) World shares fell on Thursday, led by the biggest tumble in Chinese stocks in more than eight months, as concern mounted about a new coronavirus outbreak in China.

France, U.S. agree to push global ‘digital tax’ talks forward (Reuters) France and the United States agreed on Thursday how to press ahead with a global rewrite of cross-border tax rules for the digital era, French Finance Minister Bruno Le Maire said.

ECB launches review, keeps policy on hold (Reuters) The European Central Bank left its policy unchanged on Thursday and launched a “strategic review” of its inflation goal and tools.

Bank of England eases liquidity system as Brexit transition deal looms (Reuters) The Bank of England said it will ease its liquidity monitoring system put in place in case Britain left the European Union without a transition deal.

Thai bourse to miss expansion target as economy slows (Reuters) Thailand’s stock market will not reach its goal to expand by nearly 50% from current levels by 2023, its president said on Thursday, as the country’s economic slowdown is hurting share prices.

Thailand plans new tax incentives to boost investment (Reuters) Thailand’s finance ministry will submit to the cabinet on Tuesday a package of tax incentives to encourage investment, a deputy prime minister said on Thursday, as the government looks to revive a flagging economy.

Market Overview: US 10yr note futures are up 0.145% at 129-24, S&P 500 futures are down -0.15% at 3314.75, Crude oil futures are down -1.89% at $55.67, Gold futures are down -0.07% at $1555.6, DXY is up 0.02% at 97.542, CAD/USD is up 0.2% at 0.7598.

Cda BenchmarksYieldTsy BenchmarksYield
2 Year1.534%2 Year1.512%
5 Year1.439%5 Year1.554%
10 Year1.432%10 Year1.741%
30 Year1.567%30 Year2.185%

US Economic Data

08:30 AMInitial Jobless Claims, Jan 18  Survey: 214k  Prior: 204k
      Continuing Claims, Jan 11  Survey: 1756k  Prior: 1767k
09:45 AMBloomberg Economic Expectations, Jan  Survey: —  Prior: 56.5
        Bloomberg Consumer Comfort, Jan 19  Survey: —  Prior: 66.0
10:00 AMLeading Index, Dec  Survey: -0.20%  Prior: 0.00%
11:00 AMKansas City Fed Manf. Activity, Jan  Survey: -6  Prior: -8

Canadian Economic Data

There is no Canadian economic data for today.

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