Market Update
US tsys trading slightly higher ahead of Fed chair Powell 2nd day of testimony before the US House, 10Y 2.63%, avg volume in TY futures. SPX futures lower, USD index off the lows. Crude 2% higher 56.65 after Saudis said OPEC will stick to production cuts despite pressure from trump. Core EGBs mixed, UK gilt yields higher for 3rd day, 10Y 1.21% , German 10Y bund yields ~1bp lower. GOCs unch before Jan CPI (1.4% exp vs 2.0% Dec). The strong Dec reading was largely driven by a 22% jump in airfares, while retail gas prices were 3% lower m/m in Jan. The BOC auctions $3.0bln in 2Y bonds at noon – reopening of the 1.75% May 21 issue with the M21/2Y roll 0.6/0.4.
News headlines
Impact of India-Pakistan tensions spreads from Asia to Europe (Reuters) Global stocks traded lower on Wednesday after fresh hostilities between India and Pakistan led Asian assets to slip and investors sought “safe havens” such as the yen and Swiss franc.
Stocks Drop on Earnings, India; Pound Strengthens: Markets Wrap (Bloomberg) U.S. equity futures fell and stocks dropped in Europe as headwinds emerged from disappointing corporate earnings to geopolitical tension in Asia. The dollar and Treasuries were steady as traders await the second half of Federal Reserve Chairman Jerome Powell’s testimony to Congress.
Futures dip as Trump-Kim summit starts, India-Pakistan tensions flare (Reuters) U.S. stock index futures edged lower on Wednesday, mirroring global markets, as the second U.S.-North Korean nuclear summit kicked off and fresh hostilities erupted between nuclear-armed neighbors India and Pakistan.
U.S.-China trade: tariff and non-tariff barriers (Reuters) U.S. President Donald Trump said this week he may soon sign a deal with Chinese President Xi Jinping to end a trade war blamed for slowing global economic growth and disrupting markets.
WTO agrees terms to keep Britain in procurement deal post-Brexit (Reuters) Britain has agreement at the World Trade Organization to remain within the WTO’s Government Procurement Agreement after it leaves the European Union, Britain’s mission said.
TSX futures drop on global cues (Reuters) Futures for Canada’s main stock index fell on Wednesday, tracking a drop in global markets.
Powell says Fed in no rush to make judgment on policy changes (BNN) Federal Reserve Chairman Jerome Powell said a healthy U.S. economy has faced some “crosscurrents and conflicting signals” that officials in January decided warranted taking a patient approach to future interest-rate changes.
Oil Climbs as Saudis Stick to Supply Cuts Despite Trump Pressure (Bloomberg) Oil climbed in New York as Saudi Arabia signaled that OPEC and its allies will keep going with production cuts despite pressure from U.S. President Donald Trump to moderate prices.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.755% | 2 Year | 2.474% |
| 5 Year | 1.765% | 5 Year | 2.438% |
| 10 Year | 1.862% | 10 Year | 2.632% |
| 30 Year | 2.118% | 30 Year | 3.009% |
Canadian Economic Data
| 8:30 AM | CPI NSA MoM, Jan Surv 0.1% Actual 0.1% Prior -0.1% |
| CPI YoY, Jan Surv 1.4% Actual 1.4% Prior 2.0% | |
| Consumer Price Index, Jan Surv 133.6 Actual 133.6 Prior 133.4 |
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