Market Update
Tsys moving higher after Feb Durable Goods ex transport came in below exp 0.4% vs 0.6%, recouping overnight losses in low volume session as mkts continue to await vote on health care bill in Us house. Equity futures up slightly, crude up 0.50%. Core Euro bonds higher, 10Y tsy/bund continues to retreat from Tuesday’s 195bp low, now above 200. The Dutch State Treasury released their updated 2017 borrowing pgm, sees issuance requirement continuing to decline, revises budget surplus to 0.5% from balanced in Dec, and inflation rising to 1.6% this yr from 0.9% forecast in Dec. US tsy secretary Mnuchin on the tape saying he expects Obamacare repeal/replace to pass the House. GOCs higher, curve flatter after Feb Cdn CPI came in as exp 0.2% m/m, thou CPI y/y slowed to 2.0% from 2.1% in Jan. Provincials opening unch after closing 1bp toghter after well received Ontario 27 issue @ 75.5, now 75/74 with no supply expected today. BCIMCR in the mkt yeserday with $250mm long 5Y (August 2022) @ 93.1 & $500mm 10Y @ 120.2. The 10Y tranche appeared more interesting given the ~4bp concession.
News headlines
Stocks Slide as Vote Sidelines Traders; Oil Rises: Markets Wrap (Bloomberg) European stocks gave up some of Thursday’s gains while bonds advanced before a U.S. health-care vote that has dominated market sentiment this week. The STOXX Europe 600 Index extended its weekly decline, with insurers and energy companies the biggest losers, as trading volumes dropped by almost a third from the previous week. The yen halted its longest rally since 2011 as U.S.
Euro-Area Economic Momentum Bodes Well for Prices and Jobs (Bloomberg) The euro area’s accelerating economy is translating into faster job creation and stronger inflation pressures. A key gauge of activity rose to a near six-year high in March, and employment increased the most since July 2007, with hiring picking up both in services and manufacturing. The jump in the headline IHS Markit Purchasing Managers Index compared with economists’ expectation for a decline and the latest reading is in line with a quarterly economic expansion of 0.6 percent. That’s faster than the 0.4 percent pace in the last three months of 2016.
Oil edges up as Saudis cut supplies to U.S., but global glut remains (Reuters) Oil edged higher on Friday, boosted by hopes that an OPEC output cut was beginning to balance a long-oversupplied market, but benchmark prices were on track for weekly losses as concerns persisted over an excess of crude. Benchmark Brent crude futures LCOc1 were at $50.86 per barrel at 1040 GMT (6:40 a.m. ET), up 30 cents from their last close.
Trump Dares GOP in High-Stakes Vote on Troubled Health Bill (Bloomberg) House GOP leaders are hurtling toward a vote Friday on their embattled health-care bill without knowing for sure whether they have enough support to pass the measure, after yielding to Trump administration demands to act now. If the high-stakes gamble works and the House manages to pass the Obamacare replacement bill, it will be an important win for President Donald Trump and House Speaker Paul Ryan who have formed an uneasy alliance to repeal the health care law.
TransCanada gets presidential permit for Keystone XL (Reuters) TransCanada Corp (TRP.TO) said on Friday the U.S. Department of State issued a presidential permit for the construction of the Keystone XL pipeline linking Canadian oil sands to U.S. refiners, a project blocked by former President Barack Obama. President Donald Trump signed an executive order to advance the project soon after taking office in January, saying it would create thousands of jobs.
Deutsche Bank picks new London office in show of faith in Britain (TheGlobeAndMail) Deutsche Bank has chosen a new office for its London headquarters, signaling a vote of confidence in Britain’s capital despite the country’s decision to leave the European Union. The German lender has entered into exclusive negotiations with developer Land Securities over a 25-year lease on a new building to be constructed at 21 Moorfields in the City of London, according to a memo sent to staff on Thursday and seen by Reuters.
Overnight markets
Overview: US 10yr note futures are down 0% at 124-13, S&P 500 futures are up 0.21% at 2345, Crude oil futures are up 0.8% at $48.08, Gold futures are down -0.13% at $1248.5, DXY is down -0.09% at 99.675, CAD/USD is up 0.23% at 0.7473.
US Economic Data
| 8:30 AM | Durable Goods Orders, Feb P, 1.7%, est. 1.3% (prior 2.0%, revised 2.3%) |
| Durables Ex Transportation, Feb P, 0.4%, est. 0.6% (prior 0.0%, revised 0.2%) | |
| Cap Goods Orders Nondef Ex Air, Feb P, -0.1%, est. 0.5% (prior -0.1%, revised 0.1%) | |
| Cap Goods Ship Nondef Ex Air, Feb P, 1.0%, est. 0.2% (prior -0.4%, revised -0.3%) | |
| 9:45 AM | Markit US Manufacturing PMI, Mar P, est. 54.8 (prior 54.2) |
| Markit US Services PMI, Mar P, est. 54.0 (prior 53.8) | |
| Markit US Composite PMI, (prior 54.1) | |
| 10:00 AM | Revisions: Wholesale sales and inventories |
Canadian Economic Data
| 8:30 AM | CPI NSA, m/m, Feb, 0.2%, est. 0.2% (prior 0.9%) |
| CPI, y/y, Feb, 2.0%, est. 2.1% (prior 2.1%) | |
| CPI Core – Common, y/y, Feb, 1.3%, (prior 1.3%) | |
| CPI Core – Median, y/y, Feb, 1.9%, (prior 1.9%) | |
| CPI Core – Trim, y/y, Feb, 1.6%, (prior 1.7%) |
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