Market Update
US tsys trading higher, yields 1-1.5bps lower 10Y 2.477% . Prices fell in Europe after rising initially in Asia on news that Trump had fired his AG, as well as month end buying as the estimated extension in the BB Barclays Tsy Index is 0.07yrs. Yet gains evaporated on strength in EU CPI, Spanish CPI . GOCS coming under pressure after Nov GDP came in above exp 0.4% vs 0.3% exp, led by a 1.4% rebound in manufacturing. Ontarios getting lifted across the curve on screen, Ont 26s @ 80.5, Ont 48s @92 after closing slightly tighter yest. Ont 26 81.5/81, QC/Ont 26 2/1 back to 3 mnth narrows. Perphiral spds another 0.5bps tighter yest led by Alta, MP.
News headlines
Bonds Slump as Inflation Tilts Bets Toward Stocks: Markets Wrap (Bloomberg) European bonds fell and stocks rose as inflation data prompted investors to switch into assets that may benefit from a regional economic revival. Gold advanced as Donald Trump’s firing of the U.S. acting attorney general added to concern over the unpredictability of decisions in the new administration.
German Unemployment Falls to Record Low as Economy Gathers Pace (Bloomberg) German unemployment fell to a record low in January in a sign that Europe’s largest economy is gathering momentum. The jobless rate declined to 5.9 percent, the lowest level since reunification, as the number of people out of work slid by a seasonally adjusted 26,000 to 2.61 million, data from the Federal Labor Agency in Nuremberg showed on Tuesday
BOJ upgrades growth forecasts, warns of risks to inflation outlook (Reuters) The Bank of Japan raised its growth projections on Tuesday but warned that prospects for hitting its 2 percent inflation target remained uncertain, suggesting policy makers were wary about Corporate Japan’s willingness to lift wages seen as vital to boosting domestic demand.
Euro-Area Inflation Surges to 1.8%, Intensifying ECB Debate (Bloomberg) Euro-area inflation accelerated more than forecast to effectively reach the European Central Bank’s goal, which may intensify a debate among policy makers about their long-running stimulus programs.
Euro jumps after ‘grossly undervalued’ comment from Trump advisor (Reuters) The euro jumped against the dollar on Tuesday after U.S. President Donald Trump’s trade advisor told the Financial Times that Germany was benefiting from a « grossly undervalued » euro.
Overnight markets
Overview: US 10yr note futures are down -0.0126% at 124-7, S&P 500 futures are down -0.21% at 2271.25, Crude oil futures are up 0.67% at $52.98, Gold futures are up 0.94% at $1207.3, DXY is down -0.44% at 99.985, CAD/USD is down -0.59% at 0.7667.
US Economic Data
| 8:30 AM | Employment Cost Index, 4Q, 0.5% ,est. 0.6% (prior 0.6%) |
| 9:00 AM | S&P Case-Shiller Home Price Index, Nov, est. 0.65% (prior 0.63%) |
| 9:45 AM | Chicago Purchasing Manager Index, Jan, est. 55.0 (prior 54.6) |
| 10:00 AM | Conference Board Consumer Confidence Index, Jan, est. 112.8 (prior 113.7) |
Canadian Economic Data
| 8:30 AM | GDP, m/m, Nov, 0.4%, est. 0.3% (prior -0.3%, revised -0.2%) |
| GDP, y/y, Nov, 1.6%, est. 1.4% (prior 1.5%, revised 1.6%) | |
| Industrial Production Price, m/m, Dec, 0.4%, est. 0.5% (prior 0.3%, revised 0.4%) | |
| Raw Material Price Index, Dec, 6.5%, est. 2.8% (prior -2.0%, revised -1.6%) |
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