Market Update

US tsys trading higher, 10Y 2.64%(-2bps), after US Dec Housing Starts fell to a two-year low (-11.2% m/m vs -0.1% exp.) and as German bunds reverse earlier declines. Fed Chairman Powell speaks before US Congress at 10:00am. UK Gilts lagging, 10Y bund/gilt spd 3bps wider, as PM May said she does not want to extend Brexit talks, prepared to leave with no-deal Brexit. GOCs higher, outperforming tsys by 0.5bps in 10s, the 10Y 1.87%.  Jan CPI tomorrow (1.4% exp vs 2.0% in Dec) – gas prices ~15% lower than a year ago likely big factor. Provis unch,  more supply expected , latent demand for spread product with corp new issuance running ~20% lower than yr ago.

News headlines

Stocks Slide as Trade Optimism Wanes; Pound Jumps: Markets Wrap (Bloomberg) Global stocks dropped on Tuesday as the rush of optimism over U.S.-China trade talks from earlier in the week faded. The pound rallied as U.K. Prime Minister Theresa May promised a vote to delay Brexit if her proposed deal fails.

Pound leaps on Brexit hopes, shares take a breather (Reuters) World shares took a breather on Tuesday having scaled a five-month high, while Britain’s pound charged to a one-month top on renewed speculation that UK Prime Minister Theresa May was being bundled towards delaying Brexit.

Trump says ‘signing summit’ with Xi for U.S.-China deal possible soon (Reuters) U.S. President Donald Trump said on Monday he may soon sign a deal to end a trade war with Chinese President Xi Jinping if their countries can bridge remaining differences, saying negotiators were “very, very close” to a deal.

Bank of England likely to help economy after no-deal Brexit: Carney (Reuters) Bank of England Governor Mark Carney said on Tuesday the BoE would probably give more support to the economy if it suffers the shock of a no-deal Brexit, but that the options available to the British central bank would be limited.

‘Loser’ vs ‘Anemic’: Barrick’s Newmont bid starts on toxic note (Reuters) Long-time rivals Barrick Gold Corp and Newmont Mining Corp renewed their animosity on Monday with their chief executives trading insults after Barrick launched an $18 billion hostile bid for the U.S. company, presaging an aggressive battle.

Oil Steady After Biggest Loss in a Month as Trump Presses OPEC (Bloomberg) Oil steadied after falling the most in almost a month on Monday, when President Donald Trump called on OPEC to temper prices.

Powell to Duck Taking Sides as Two Fed Camps Square Off on Rates (Bloomberg) Federal Reserve Chairman Jerome Powell will probably gloss over an emerging division among policy makers about what it will take for them to resume raising interest rates when he speaks to lawmakers on Tuesday.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.777% 2 Year 2.494%
5 Year 1.793% 5 Year 2.464%
10 Year 1.887% 10 Year 2.655%
30 Year 2.138% 30 Year 3.025%

US Economic Data

8:30 AM Housing Starts, Dec Surv 1256k Prior 1256k
    Building Permits, Dec Surv 1290k Prior 1328k
       Housing Starts MoM, Dec Surv -0.1% Prior 3.2%
   Building Permits MoM, Dec Surv -2.6% Prior 5.0%
9:00 AM FHFA House Price Index MoM, Dec Surv 0.4% Prior 0.4%
    S&P CoreLogic CS 20-City YoY NSA, Dec Surv 4.5% Prior 4.68%
       S&P CoreLogic CS 20-City NSA Index, Dec Prior 213.66
10:00 AM Richmond Fed Manufact. Index, Feb Surv 5 Prior -2
   Conf. Board Consumer Confidence, Feb Surv 124.9 Prior 120.2

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