cti2015header-morning comments web

Market update

US tsys opening lower led by the 5Y (+2.3bps @ 1.45%) with the 10Y 2.01 (+1.9bps)- narrow o/n range with prices breaking lower in the last hr as European equities , crude rebound from losses. FOMC this aft, no change expected yet stmt should reflect deterioration in eco env and risks to growth posed from weakness overseas, lower commodities. Mkt barely pricing in one rate hike all year so a less dovish stmt could impact the short end. GOCs are lower, spds 1-2bps narrower vs tsys, longs still heavy 10/30 @80. Provis 0.5bps wider after closing weaker yest after initial rally, selling vs new issues  a factor keeping spds under pressure (Mcgill , Nwrwpt)

News headlines

  • Bond Bulls Bank on Fed Mention of Market Chaos as Drag on Growth (Bloomberg) Bond bulls are looking to the Federal Reserve’s decision Wednesday for vindication as Treasuries head for their best month in a year.
  • Alberta lost the most jobs in 2015 since 1980s recession: Statistics Canada (Financial Post) Alberta lost more jobs last year than in any year since the 1982 recession, revised numbers from Statistics Canada show.The updated figures released Tuesday show the province lost 19,600 jobs in 2015, up from an earlier estimate of 14,600.
  • Fed seen keeping interest rates steady amid market volatility (Reuters) The Federal Reserve is expected to leave interest rates unchanged on Wednesday and acknowledge that turmoil in financial markets threatens its upbeat view of the U.S. economy, leaving the chances of a March hike diminished but alive.
  • Oil falls as inventory build dashes optimism over supply (Reuters) Oil futures fell on Wednesday, after a surprise rise in U.S. inventories wiped out the optimism that had built up the day before over the potential for the world’s largest exporters to cut output enough to stem a 19-month-long price slide.
  • Apple Says Sales of iPhones Have Slowed (NYTimes) Apple on Tuesday reported results for its fiscal first quarter that showed iPhone sales rose less than 1 percent from a year earlier, the slowest year-over-year growth rate ever for the device, which accounts for about two-thirds of the company’s revenue. Apple also issued a sales forecast that signaled that the sluggishness would continue, with the company projecting its first revenue decline in more than a decade.


Overnight markets

  • Overview: US 10yr note futures are down -0.18% at 128-19, S&P 500 futures are down -0.26% at 1891, Crude oil futures are down -2.16% at $30.77, Gold futures are down -0.14% at $1119, DXY is down-0.52% at 98.845.

US Economic Data

  • Mortgage application increased for the third week in a row, rising 8.8% from one week earlier, according to the latest data from the Mortgage Bankers Association’s weekly mortgage applications survey for the week ending Jan. 22, 2016.
  • New home sales figures for December are due at 10am. Economists forecast that new-home sales rose 2 percent last month to a seasonally adjusted annual rate of 500,000, according to a survey by data firm FactSet.
  • The Federal Reserve concludes its latest Federal Open Market Committee (FOMC) meeting with a statement release due at 2pm.

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