Market Update
US tsys trading lower reversing yesterday’s gains, 10Y 2.44% (+4bps) with the long end outperforming. equity futures higher (S&P +14.75, Nasdaq +41). Housing Starts fell the most in eight months in Feb -8.7% vs -1.6% exp . The US auctions $40bln in 2Y notes at 1:00PM, the WI at 2.27% is below the 2Y auction level since Feb 2018 and 20bps richer than last month. Mars Inc to price eight-part USDF benchmark this morn, CIBC issuing 5Y USD bail-in bonds @~105bps (GOCs + 126) . Volatility is back in the US treasury mkt based on the ‘MOVE’ index- which has surged to the highest level since 2016 over the last two days. GOCs lower, outperforming tsys by ~bp across the curve, provis 1-1.5bps tighter.
News headlines
Treasury Yields Rise as U.S. Stock Futures Advance: Markets Wrap (Bloomberg) Treasuries fell and U.S. stock index futures climbed on Tuesday as investor fears triggered by signals from the American bond market showed signs of easing. The dollar was steady and European shares advanced.
Recession obsession keeps the mood subdued (Reuters) Calm returned to global markets on Tuesday as a steadier day for Europe and Asia’s bourses and a tick higher in benchmark bond yields helped ease nerves after a jarring few days dominated by recession worries.
Macron calls on China and EU to strengthen multilateralism (Reuters) French President Emmanuel Macron on Tuesday said competition between the European Union and China must not lead to a breakdown in world trade systems or political isolationism, as his Chinese counterpart promised to work side-by-side with Europe.
Fed could build firepower for new Operation Twist: Harker (Reuters) The U.S. Federal Reserve intends to shorten the duration of bonds it has on its balance sheet to build some firepower in case it needs to use it as a stimulus tool once again, Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday.
TSX futures rise on higher oil prices (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Tuesday, as oil prices rose with OPEC-led supply cuts and expectations of lower U.S. inventories countering concerns about global economic growth.
Canada’s inverted yield curve signals holding pattern for Poloz (BNN) Canada has joined the U.S. in the inverted yield curve club, signaling a growing risk of recession that may keep Stephen Poloz on hold for his final 14 months as head of Canada’s central bank.
SNC Dealt Another Blow With Copper Mine Project Cancellation (Bloomberg) SNC-Lavalin Group Inc., the embattled engineering firm at the heart of Canada’s biggest political crisis in years, has been dealt another blow in Chile.
Oil Rises as Growth Angst Eases, Venezuela Fears Mount (Bloomberg) Oil rebounded along with global markets as pessimism over the global growth outlook eased a little, while rising tension in Venezuela revived fears of supply losses.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.514% | 2 Year | 2.293% |
| 5 Year | 1.477% | 5 Year | 2.235% |
| 10 Year | 1.59% | 10 Year | 2.446% |
| 30 Year | 1.883% | 30 Year | 2.896% |
US Economic Data
| 8:30 AM | Housing Starts, Feb Surv 1210k Prior 1230k |
| Housing Starts MoM, Feb Surv -1.6% Prior 18.6% | |
| Building Permits, Feb Surv 1305k Prior 1345k | |
| 9:00 AM | FHFA House Price Index MoM, Jan Surv 0.4% Prior 0.3% |
| S&P CoreLogic CS 20-City YoY NSA, Jan Surv 3.80% Prior 4.18% | |
| S&P CoreLogic CS 20-City NSA Index, Jan Surv 212.79 Prior 212.96 | |
| 10:00 AM | Richmond Fed Manufact. Index, Mar Surv 10 Prior 16 |
| Conf. Board Consumer Confidence, Mar Surv 132.5 Prior 131.4 |
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