Market Update
Tsys weaker, 10Y 2.64%,(+2.4bps), above avg volume in TY futures, reversing some of yest late aft rally. Equities firmer (S&P fut + 9.25), gold higher, crude unch 65.60 , USD weaker reversing Trump bounce on Trump. Tsys lower with bunds after Draghi sounded optimistic on EU growth , while ECB member Coeure noted inflation is picking up with wages, while the ECB remains data dependent. GOCs lower in line with tsys, 10Y 2.26%, longs continue to outperform on the curve 10s30s @ 8bps, the flattest relative to the US since October. Provincial spds unch yest, longs 1bp wider as the GOC curve narrows. Dollarama in the mkt with a 3Y FRN @ 27 yest, now 25/23.
News headlines
Trump Woos CEOs in Davos Debut While Others Consider Boycott (Bloomberg) It was a scene more reminiscent of President Donald Trump’s own Cabinet meetings than a staid forum of global elites in the Swiss Alps: Trump, at a table of top executives from Europe’s most important companies, holding court as they took turns trying to impress him.
Trump Says Dollar to Strengthen, Mnuchin ‘Taken Out of Context’ (Bloomberg) President Donald Trump declared that the dollar would continue to strengthen and that remarks made by his Treasury secretary suggesting support for a weaker U.S. currency the day before had been taken out of context.
U.K. Economy Remains a Laggard Even as GDP Beats Forecasts (Bloomberg) The 0.5 percent expansion in the fourth quarter announced on Friday was better than the 0.4 percent forecast by economists in a Bloomberg survey. For the full year, growth slowed to 1.8 percent, the weakest in five years, as consumers and companies felt the repercussions of the 2016 vote to the leave the European Union.
Trump Rallies Dollar as Stocks Wobble, Crude Falls: Markets Wrap (Bloomberg) President Donald Trump waded into the unusual public debate over currency valuations, roiling markets after he said that he favored a strong greenback just a day after his Treasury secretary endorsed a weak dollar.
Oil Set for Weekly Gain as Crude Stockpiles and Dollar Decline (Bloomberg) Futures have climbed 3.8 percent in New York this week after reaching the highest since December 2014 on Thursday. Crude stockpiles fell for a 10th week to the lowest level since February 2015, according to Energy Information Administration data Wednesday. The weaker dollar has made oil more attractive to investors.
Bombardier expected to lose U.S. trade dispute: Canadian government source (Reuters) Planemaker Bombardier Inc is expected to lose a hotly contested U.S. trade dispute this week, a Canadian government source told Reuters on Thursday, likely inflaming tensions between the two countries during talks to modernize NAFTA.
World stocks set for 10th straight week of gains, euro jumps (Reuters) World stocks were set for their 10th straight week of gains on Friday, while the euro jumped more than half a percent as comments by U.S. officials this week advocating their support for a weak dollar reverberated through currency markets.
Dividend increases predicted as energy companies prepare 4th-quarter reports amid oil price rebound (CBC) A rally in oil prices that started late last year and shows no signs of stopping in 2018 is expected to pave the way for bigger payouts for long-suffering Canadian energy investors as fourth-quarter reporting season gets underway in the next month.
Overnight markets
Overview: US 10yr note futures are down -0.166% at 122-08, S&P 500 futures are up 0.33% at 2850.75, Crude oil futures are up 0.05% at $65.54, Gold futures are down -0.91% at $1355.6, DXY is down -0.37% at 89.057, CAD/USD is down -0.52% at 0.8123.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.816% | 2 Year | 2.108% |
| 5 Year | 2.059% | 5 Year | 2.447% |
| 10 Year | 2.261% | 10 Year | 2.638% |
| 30 Year | 2.347% | 30 Year | 2.894% |
US Economic Data
| 8:30 AM | Advance Goods Trade Balance, Dec est -68.9b (-69.7b prior) |
| Wholesale Inventories MoM, Dec est 0.4% (0.8% prior) | |
| Retail Inventories MoM, Dec (0.1% prior) | |
| GDP Annualized QoQ, 4Q est 3% (3.2% prior) | |
| Personal Consumption, 4Q est 3.7% (2.2% prior) | |
| GDP Price Index, 4Q est 2.3% (2.1% prior) | |
| Core PCE QoQ, 4Q est 1.9% (1.3% prior) | |
| Durable Goods Orders, DEc est 0.8% (1.3% prior) | |
| Durables Ex Transportation, Dec est 0.6% (-0.1% prior) | |
| Cap Goods Orders Nondef Ex Air, Dec est 0.6% (-0.2% prior) | |
| Cap Goods Ship Nondef Ex Air, Dec est 0.4% (-0.1% prior) |
Canadian Economic Data
| 8:30 AM | CPI NSA MoM, Dec est -0.3% (0.3% prior) |
| CPI YoY, Dec est 1.9% (2.1% prior) | |
| Consumer Price Index, Dec (131.3 prior) | |
| CPI Core Common YoY%, Dec (1.5% prior) | |
| CPI Core Median YoY%, Dec (1.9% prior) | |
| CPI Core Trim YoY%, Dec (1.8% prior) |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230