Market Update
US tsys trading weaker, Jan ADP 213k vs 180k exp, yields 1-2bps higher with the 10Y 2.73%. Equity futures at the highs of o/n session (S&P +11) – positive earnings from Apple and Boeing while AT&T posted in line eps while revenues lagged estimates. FOMC later this aft – no change in rates exp thou Powell is expected to address rumours of a curtailing the runoff in the Fed’s balance sheet. GOCs lower in line with tsys – Nov GDP tommorrow expcted to show 0.1% decline the first monthly contraction since Jan 2018.
News headlines
Powell to Stress Fed Patience on Rate Hikes: Decision Day Guide (Bloomberg) Jerome Powell will debut the Federal Reserve’s latest communications strategy — a press conference eight times a year — by emphasizing patience in raising interest rates, a message the chairman struggled to deliver in December.
Stocks steady before Fed as Apple relief offsets Brexit complications (Reuters) World stocks and the dollar steadied on Wednesday ahead of policy guidance from the U.S. Federal Reserve, with Apple results providing relief while market confidence that a no-deal Brexit can be avoided took a hit.
Fed likely to hold rates steady as it navigates data blind spots (Reuters) In the six weeks since a confident U.S. Federal Reserve raised interest rates in response to a “strong” U.S. economy, consumer confidence dropped, wholesale prices weakened, financial markets wobbled and home sales fell.
Canada Has Until March to Assess U.S. Request for Huawei CFO (Bloomberg) Canada has until March 1 to assess a U.S. request to extradite the chief financial officer of Huawei Technologies Co. in a case that’s sparked an unprecedented diplomatic dispute as Washington broadens its attack on the Chinese technology giant.
U.S. sends 70 questions to WTO about China’s subsidies (Reuters) The United States has accused China of hiding some trade-distorting subsidy programs from international scrutiny while disclosing others it does not need to, according to a document circulated on Wednesday at the World Trade Organization.
Oil Extends Gain After Rising Most in a Week on Venezuela Crisis (Bloomberg) Oil rises in New York after jumping the most in more than a week on concerns that U.S. sanctions on Venezuela will pose significant market disruption.
U.S., China face deep trade, IP differences in high-level talks (Reuters) The United States and China launch a critical round of trade talks on Wednesday amid deep differences over Washington’s demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 U.S. tariff hike.
TSX futures rise on higher oil prices (Reuters) Futures for Canada’s main stock index edged higher on Wednesday, as oil prices rose on supply concerns after the United States imposed sanctions on Venezuela’s exports.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.857% | 2 Year | 2.579% |
| 5 Year | 1.875% | 5 Year | 2.557% |
| 10 Year | 1.954% | 10 Year | 2.722% |
| 30 Year | 2.18% | 30 Year | 3.045% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Jan 25 Actual -3.0% Prior -2.7% |
| 8:15 AM | ADP Employment change, Jan Surv 181K Prior 271K |
| 10:00 AM | Pending Home Sales MoM, Dec Surv 0.5% Prior -0.7% |
| Pending Home Sales NSA YoY, Dec Surv -7.0% Prior -7.7% | |
| 2:00 PM | FOMC Rate Decision (Upper Bound), Jan 30 Surv 2.50% Prior 2.50% |
| FOMC Rate Decision (Lower Bound), Jan 30 Surv 2.25% Prior 2.25% |
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