cti2015header-morning comments web

Market Update

US tsys higher, yields another 1-2bps lower, with the US 10Y 2.358% (-1.8bps) in follow thru to yesterday’s ‘risk off’ rally.  European stocks are off 1.4% , the USD index is lower for a third day, while crude is trading below $54, down 0.86%. Tsys were flat in Asia but rallied in Europe amid weaker stocks, weaker USD/JPY. GOCs  higher , spds 1-2 bps wider vs tsys after Jan CPI more than doubled forecasts 0.9% vs 0.4% on a 21% rise in gas prices, curve still retaining its flatter bias led by 5s. Provis ended tighter again yest ~1bp despite a so-so  NB 10Y.Alberta Q3 update – deficit for FY17 unch from Q2 forecast at $10.8bln with direct borrowing increasing by $1.1bln compared to budget. No impact on spds.

News headlines 

Futures drop along with oil prices (Reuters) U.S. stock index futures were lower on Friday as a drop in oil prices weighed on the « Trump rally », with investors also seeking details regarding President Donald Trump’s plans to boost the economy. Oil prices fell after U.S. crude inventories rose for a seventh week, showing the market is still struggling to ease oversupply.

Oil futures suggest bullish funds’ big bet on price may pay off (Reuters) Oil investors have placed the biggest bet in history that prices will rise, as the world’s largest exporters cut output to reduce a glut in supply, and the futures market is suggesting for the first time in a year that they could be onto a winner.

China says no intention of using currency devaluation to its advantage (Reuters) China said on Friday it had no intention of using currency devaluation to its advantage in trade, responding to U.S. President Donald Trump’s description of the Asian giant as the « grand champions » of currency manipulation.

Magna warns of Trump, Brexit impact; raises dividend (GlobeAndMail) Magna International Inc. will raise its dividend 10 per cent, but warned Friday that Brexit and the election of Donald Trump could harm its business and the auto sector generally.

RBC boosts dividend after profit surges 24% to $3 billion, beating expectations (Financial Post) Royal Bank of Canada boosted its first-quarter net income by 24 per cent to $3.03 billion. That’s compared to the $2.45 billion of net income that RBC had during the first quarter of last year.

How Costco Canada breaks retail rules to win (Financial Post) Not far from a table stacked high with men’s blue jeans at one of Canada’s busiest Costco Wholesale Corp. stores is a standalone display for the InstaShiatsu, a cordless neck and back massager that bears all the hallmarks of a juicy impulse buy.

Overnight markets 

Overview: US 10yr note futures are up 0.325% at 125-15, S&P 500 futures are down -0.52% at 2350.5, Crude oil futures are down -0.94% at $53.94, Gold futures are up 0.74% at $1260.7, DXY is down -0.33% at 100.72, CAD/USD is down -0.2% at 0.7646.

US Economic Data

10:00 AM New Home Sales, Jan, est. 571k (prior 536k)
New Home Sales, m/m, Jan, est. 6.4% (prior -10.4%)
University of Michigan Sentiment, Feb F, est. 96.0 (prior 95.7)

Canadian Economic Data

8:30 AM CPI NSA, m/m, Jan, 0.9%,est. 0.4% (prior -0.2%)
CPI, y/y, Jan, 2.1%, est. 1.6% (prior 1.5%)
CPI Core – Common, 1.3%, y/y, Jan, (prior 1.4%)
CPI Core – Median, y/y, 1.9%, Jan, (prior 2.0%, revised 1.9%)
CPI Core – Trim, y/y, 1.7%, Jan, (prior 1.6%)


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