Market Update

Tsys slightly higher, yields 1bp lower , recovering overnite losses on uncertainty over ACA vote, low volume in TY1 futures, US 10Y 2.40%. Various Fed speakers this morning including Fed Yellen who did not comment on monetary policy – key health care vote later tonight. The USD traded in the narrowest range so far this yr, should the health care repeal fail the USD could fully erase gains made since the election. Core Euro govt bonds lower, 10Y gilt 1bp higher @ 1.185% on strong Feb retail sales. GOCs higher, in line with tsys as prices bounce off the lows.  Budget was basically a non event: deficit expected to rise to $28.5bln for 17/18 from est $23bln and the timeline for eliminating deficits pushed beyond 2021-22. Sask budget also released last nite – no impact on Sask/Ont rolls so far.

News headlines 

Global Stock Selloff Eases as Yen Extends Rally: Markets Wrap (Bloomberg) A global equities selloff that spurred the biggest drop in shares since Donald Trump’s election eased as investors stepped back before a key U.S. vote on health care. The yen gained for an eighth day, the longest winning streak in six years.

Oil up from four-month lows, inventories curb recovery (Reuters) Oil prices rallied from four-month lows on Thursday but the recovery was cautious with investors concerned that OPEC-led supply cuts were not yet reducing record U.S. crude inventories. Brent crude, the international benchmark for oil, was trading at $51.02 a barrel by 1112 GMT (7:12 a.m. ET), up 38 cents on the day and rebounding from Wednesday’s slide to $49.71, it lowest level since Nov. 30 when OPEC announced plans to cut output.

Banks Take $252 Billion in ECB Free Loans With QE Exit in Mind (Bloomberg) The European Central Bank gave euro-area banks 233.5 billion euros ($252 billion) in its last offer of free long-term cash, the largest net amount since the program was launched. Banks’ interest in Targeted Longer-Term Refinancing Operations — four-year loans at a rate that starts at zero and could go lower — has increased as the economic recovery spurs calls for an exit strategy from ECB stimulus.

Swiss central bank bought another 67.1 billion Sfr in FX in 2016 (Reuters) Switzerland’s central bank bought another 67.1 billion Swiss francs (54.17 billion pounds) worth of foreign currencies in 2016, almost a quarter less than the previous year, in its effort to fight the appreciation of the safe-haven franc.

Canada’s `Lightweight’ Budget Is Mostly Wait and See on Trump (Bloomberg) He wasn’t mentioned once, but U.S. President Donald Trump was all over Canada’s minimalist budget. Prime Minister Justin Trudeau hit the brakes on new spending and major tax changes in a wait-and-see budget that marked a major shift for his activist administration, which last year unveiled an ambitious deficit-spending plan to stoke growth.

Canada joins China-backed Asian Infrastructure Bank (TheGlobeAndMail) The Asian Infrastructure Investment Bank has made Canada a prospective member, welcoming Ottawa into an institution that marks one of China’s leading efforts to take a place of global leadership. Joining the bank will give Canada a voice at the table of a major new multi-national organization, although with less voting clout than it might have wielded had it moved earlier, alongside 57 founding members.

Overnight markets 

Overview: US 10yr note futures are up 0.013% at 124-18, S&P 500 futures are up 0.07% at 2344.25, Crude oil futures are down -0.23% at $47.93, Gold futures are up 0.14% at $1254.5, DXY is up 0.07% at 99.743, CAD/USD is up 0.07% at 0.7498.

US Economic Data

8:30 AM Initial Jobless Claims, Mar 18, 258k, est. 240k (prior 241k, revised 243k)
Continuing Claims, Mar 11, 2000k, est. 2040k (prior 2030k, revised 2039k)
10:00 AM New Home Sales, Feb, est. 564k (prior 555k)
New Home Sales, m/m, Feb, est. 1.6% (prior 3.7%)
11:00 AM Kansas City Fed Manf, Activity, Mar, est. 14 (prior 14)

Canadian Economic Data

There is no major economic news release 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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