cti2015header-morning comments web

Market update

US tsys trading higher, curve flatter on lower crude & stocks, US 10Y 2.033 (-2.3bps), curve ~3bps flatter as 2s are ~1bp higher in yield @0.88%. Dallas Fed only real eco data in the US today, but FOMC decision on Wed looms large thou there is no press con or updated projections. Latest CFTC COT report for Jan18 showed specs adding to shorts in 2s, 10s & 30s – 10Y specs the most short since Nov 6th. In Canada, GOCs are higher , spds unch vs tsys afer last week’s ~15bp underperformance. Provis opening basically unch awaiting supply, , ont 46s 118/117, Ont 25 107/106.

News headlines

  • Opec official calls for co-operation to stem price collapse (FT) The Opec secretary-general has called on the world’s largest oil producers to help arrest the worst price collapse in decades, as one of Russia’s biggest oil companies said it would not oppose joining the cartel in output cuts.
  • Japan’s Annual Trade Deficit Narrows as Energy Import Costs Fall (Bloomberg) Japan’s annual trade deficit narrowed almost 80 percent from a record as energy import costs fell and the weaker yen helped spur a modest increase in exports.
  • Russian GDP contracted 3.7% in 2015 (FT) The Russian economy contracted 3.7 per cent in 2015, the country’s stats office said, a chunky drop that is the worst in six years, but slightly more moderate than the 3.8 per cent decline forecast by economists.
  • McDonald’s to open more than 60 restaurants in Russia in 2016 (Reuters) McDonald’s plans to open more than 60 restaurants in Russia in 2016, increasing the pace of expansion from last year, after its focus on local suppliers and affordable menus has proved successful in an economic crisis.
  • Yellen Losing Dollar Bet as its Rise Slows Growth and Inflation (Bloomberg) Federal Reserve Chair Janet Yellen and her colleagues have so far found themselves wrong-footed by the stronger dollar after they raised interest rates last month for the first time since 2006. In spite of suggestions by some officials that the U.S. currency’s rise would soon run out of steam, the dollar has appreciated by some 2 percent since the central bank last met on Dec. 16, measured on an effective exchange rate-basis. Coming on top of a 11 percent increase in the year prior, the latest advance will curb already slowing economic growth and put downward pressure on an inflation rate that the Fed judges is too low as it is.
  • Greece threatened with expulsion from Schengen over migration crisis (Reuters) European Union interior ministers on Monday urged Greece to do more to control the influx of migrants, some threatening to exclude it from the continent’s prized passport-free travel zone as the crisis increasingly divides the bloc’s members. Greece was the main gateway to Europe for more than a million refugees and migrants who reached the EU last year. But it has been criticized for a failure to control the flow of arrivals, which have shown little sign of falling over the winter months.


Overnight markets

  • Overview: US 10yr note futures are up +0.15% at 128-18, S&P 500 futures are down -0.49% at 1890.50, Crude oil futures are down -3.04%% at 31.21$, Gold futures are up +1.04% at $1107.70, DXY is down -0.27% at 99.306.

US Economic Data

  • Dallas Fed manufacturing index will be released today at 9h30am

 Canadian Economic Data

  • There is no major economic data 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