Market Update
Rates trade firmer, at/near top end of range on moderate volume, curves mildly flatter at moment; equities bumping around recent highs. Treasuries following EGBs lead after weaker European PMIs. Otherwise, generally quiet as mkts await ECB rate annc shortly. Overnight flow included early selling in 5s, better buying in 2s and 10s during early London hours, prep and real$ buying 10s and 30s more recently. Initial unemployment claims were well below expectations in the Jan 19 wk, -13k to 199k vs 210k expected. Claims were revised down to 212,000 in the Jan 12 wk from the previously reported 213k level. NSA claims were -76,558 in the Jan 19 wk, vs -58,793 seasonal factors expected.
News headlines
ECB keeps policy unchanged but may acknowledge weak growth (Reuters) The European Central Bank left its policy stance unchanged as expected on Thursday, keeping a rate hike later this year on the table even as the euro zone economy suffers its biggest slowdown in half a decade.
Stock futures edge higher, chip results soothe growth worries (Reuters) U.S. stock index futures eked out some gains on Thursday after a string of better-than-feared earnings from chipmakers helped calm concerns over trade tensions and the longest U.S. government shutdown ever.
China says to have in-depth talks with U.S. on economic, trade issues (Reuters) China and the United States will have in-depth discussions on economic and trade issues during Chinese Vice Premier Liu He’s U.S. visit next week, the Chinese commerce ministry said on Thursday.
IMF’s Lagarde: China-U.S. trade tension a major risk to global growth (Reuters) International Monetary Fund Managing Director Christine Lagarde on Thursday reiterated that the major risk facing the global economy was the trade tension between China and the United States.
Oil Slides as Economic and Supply Fears Offset Venezuela Risk (Bloomberg) Oil fell as a darkening outlook for the global economy offset the risk of American sanctions on OPEC member Venezuela’s crude.
Trump Says He’ll Put Off State of the Union Until After Shutdown (Bloomberg) President Donald Trump said he would deliver his State of the Union address when the partial government shutdown is over, clarifying his plans hours after House Speaker Nancy Pelosi blocked him from delivering the speech in the chamber while federal agencies are closed.
Bank of Canada’s next rate move depends on data, says Stephen Poloz, but hike still on the table (FP) Bank of Canada Governor Stephen Poloz said he is keeping a close eye on developments in the nation’s housing market, as well as global trade tensions and the impact of lower oil prices, as he gauges the timing of his next interest rate increase.
Volatility jumps in Canadian oil market after OPEC-style cut (BNNBloomberg) Calls for a better system to inform the market about Canadian crude inventories, output and shipments are occupying center stage after local price volatility hit unprecedented levels as the country grapples with its worst-ever pipeline crunch.
Pessimistic economic forecasts can’t be going over well at the Ministry of Finance (FP) Last week, the Canadian wing of the news-and-data machine started by U.S. billionaire Michael Bloomberg introduced us to a new participant in the “short Canada” trade, a hedge fund called Crescat Capital that is betting against this country’s banks. And on Jan. 22, it published the provocative thoughts of Jim Mylonas, a strategist at BCA Research Inc., the Montreal-based research outfit that once employed Stephen Poloz, the Bank of Canada governor. “I think we’re just on the precipice of embarking on a serious recession,” Mylonas told Bloomberg. “It’s not a matter of if, but when.”
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.878% | 2 Year | 2.573% |
| 5 Year | 1.882% | 5 Year | 2.56% |
| 10 Year | 1.946% | 10 Year | 2.723% |
| 30 Year | 2.167% | 30 Year | 3.038% |
US Economic Data
| 8:30 AM | Initial Jobless Claims, Jan 19 Surv 218K Prior 213K | |
| Continuing Claims, Jan 12 Surv 1730K Prior 1737K | ||
| 9:45 AM | Markit US Manufacturing PMI, Jan P Surv 53.5 Prior 53.8 | |
| Markit US Services PMI, Jan P Surv 54.0 Prior 54.4 | ||
| 10:00 AM | Leading Index, Dec Surv -0.1% Prior 0.2% | |
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