Commentaires

Market Update Tsys are little changed, 10Y  2.84%, avg volume in TY futures (300k).  Equity futures continuing to rise (S&P +9) after JPM reported strong Q1 rev & eps:  eps $2.37 vs $2.28 est, revenues rose to all time high $28.52bln vs $27.71bln est, higher ROE (19 vs 18), trading revenues rose 7% driven by equities – shares up 1.0% pre-mkt.   GOCs mixed, small narrower vs tsys out the curve, yesterday’s steep selloff cheapened Can-Us 2-3bps, 10Y rising to 2.28% highest since mid March while yields at the short end are the highest levels since 2011. The BOC will auction $3.0bln 2Y notes next Thurs, reopening the 1.75% May 2020 issue. Provis another 2bp tighter yesterday supported by selloff in GOCs and ‘risk on’ tone. Long Ontarios holding in well, Ont 48/27 curve @12.5 , unch on the week despite $1.8bln in long provi supply (Ont ,QC & BC). New BNS 5Y dep note yest – $2.25bln @ 85.2, now 82/81. 

News headlines

TPP Nations Welcome Trump’s Interest, Don’t Want Renegotiation (Bloomberg) Members of an 11-nation Asia-Pacific trade pact said Friday they opposed any renegotiation of the deal to accommodate the U.S. should it decide to rejoin at a later date. Ministers from Japan, Australia and Malaysia welcomed President Donald Trump directing officials to explore returning to the Trans-Pacific Partnership, a pact he withdrew from shortly after coming to office. But they also cautioned against making any significant changes.

Trump Orders Post Office Review After Attacks on Amazon (Bloomberg) President Donald Trump ordered the creation of a task force to review business practices at the United States Postal Service, a move that could affect one of the president’s favorite corporate targets: Amazon.com Inc. “The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout,” the president said in an order that was released Thursday night. The order calls for an examination of the Postal Service’s pricing, policies and workforce costs.

JPMorgan, Citi Results May Prove Whether Higher Rates Pay Off (Bloomberg) Bank investors will have their eyes trained on what the U.S. Federal Reserve’s recent interest rate increases, and a shifting yield curve, meant for first-quarter results. JPMorgan Chase & Co. kicks off earnings reports from big banks before the market opens Friday, along with Wells Fargo & Co. and Citigroup Inc. Next week, Bank of America Corp. arrives Monday, with Goldman Sachs Group Inc. Tuesday and Morgan Stanley Wednesday. The sector rose Thursday ahead of earnings, with the KBW Bank Index gaining as much as 2.8 percent intraday, helped by the prospect of looser regulation, higher 10-year Treasury yields, and easing geopolitical tensions.

Ruble Whipsawed on Trump Syria Threat, Mnuchin Sanction Remarks (Bloomberg) Russia’s ruble was whipsawed on Wednesday as Treasury Secretary Steven Mnuchin soothed traders by saying that his agency advised against Russian sovereign debt sanctions after President Donald Trump’s Syrian missile warning sent the currency tumbling earlier in the day. The pledged strikes over an alleged chemical attack in Syria and the latest round of U.S. sanctions rattled markets in Moscow, driving Russia’s currency to a 16-month low in morning hours. By afternoon, after Mnuchin reiterated his opposition to debt sanctions, it had rallied to its highest in nearly two weeks.

Canada job openings, vacancy rate climb in fourth quarter (Reuters) The number of job vacancies in Canada rose in the fourth quarter compared to a year ago, with increased openings led by the accommodation and food services, and manufacturing sectors, data from Statistics Canada showed on Thursday. There were 470,000 vacancies in the fourth quarter of 2017, up 23.2 percent from the fourth quarter of 2016. It was the largest annual increase since the series started in 2015. The vacancy rate, which measures the share of unfilled jobs out of those available, rose to 2.9 percent from 2.4 percent.

Canadian February small business lending edges up, but delinquencies rise (Reuters) Lending to small Canadian businesses edged up in February, but the number of delinquencies jumped, suggesting firms are unlikely to invest heavily in the near term, data showed on Friday. The PayNet Small Business Lending index rose to 112.0 from a downwardly revised 110.2 in January, while borrowing by medium-sized firms increased to 190.2 from 187.5. But compared to a year ago, small business lending was still down 5 percent and lending to medium firms slumped 18 percent, suggesting firms were pulling back after a strong 2017, said PayNet President Bill Phelan.

Trudeau to talk NAFTA with Mexican president and Pence in Peru (BNN) Prime Minister Justin Trudeau will aim to advance Canada’s position on the North American free trade talks when he meets with Mexican President Enrique Pena Nieto and U.S. Vice-President Mike Pence here over the next two days. There had been hopes leading up to Trudeau’s visit to Peru, where he and the others are attending the Summit of the Americas, that Canada, Mexico and the U.S. would emerge with some sort of North American free trade agreement. 

Overnight markets

Overview: US 10yr note futures are down 0% at 120-15, S&P 500 futures are up 0.31% at 2672.25, Crude oil futures are down -0.07% at $67.02, Gold futures are down -0.18% at $1339.5, DXY is up 0.07% at 89.815, CAD/USD is down -0.18% at 0.7958.

US Economic Data

Canadian Economic Data

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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update Tsys are trading lower, yields ~1bp higher across the curve on avg volume in TY futures (257k), risk-on tone as equities rise, Trump dialing back imminent threat of strike on Syria in latest tweet. Core EGBS mixed -German bonds lower into NY trading with tsys on risk-on – despite lower EU ind production data, as well as ECB minutes expressing concerns over trade disputes. GOCs lower , in line with tsys, provi spds continue to narrow as tone in equities improve.

News headlines

Trump Discussed Firing Rosenstein But Denies Bid to Oust Mueller (Bloomberg) Former strategist also advocates use of executive privilege President Donald Trump discussed firing Deputy Attorney General Rod Rosenstein with White House aides on Wednesday, a person familiar with the matter said, as a chorus of Trump’s advisers and allies urged him to thwart the investigation of Russian interference in the 2016 election.

Trump Meets Mattis as He Weighs Military Action in Syria (Bloomberg) President Donald Trump is still weighing options for U.S. military action against Syria and met with Defense Secretary Jim Mattis on Wednesday, after warning Russia on Twitter to expect a missile barrage. Trump has not yet settled on a plan to retaliate against Syrian President Bashar al-Assad for an alleged chemical weapons attack last weekend outside Damascus, and a U.S. strike isn’t expected Wednesday, two people familiar with the matter said.

Fed Sees GDP Hit From Trade War Outweighing Fleeting Inflation (Bloomberg) A trade war would leave the U.S. Federal Reserve having to decide between battling weaker economic growth or rising prices. Which one it focuses on already looks pretty clear. President Donald Trump’s administration has proposed tariffs on imported steel and aluminum, from which a number of U.S. allies would be exempt, and has threatened to slap additional measures on as much as $150 billion of Chinese goods. Higher and broader tariffs would raise the prices of those imports, potentially fanning U.S. inflation, while reducing economic activity by sapping confidence and tightening financial conditions.

China Says It Has a Detailed Plan to Hit Back at U.S. on Tariffs (Bloomberg) China will “unquestionably” retaliate if the U.S. further escalates trade tension, and authorities have prepared a detailed, comprehensive counter-punch plan, a senior trade official said. The government hasn’t conducted any negotiations at any level with American counterparts recently, Commerce Ministry Spokesman Gao Feng said Thursday at a press conference in Beijing. “We can’t talk under the unilateral threat from the U.S.,” he said.

Canada’s Trudeau to press British Columbia to accept pipeline (Reuters) Canadian Prime Minister Justin Trudeau is set to pile pressure on British Columbia’s provincial government to drop its resistance to a pipeline project, but will try to avoid tougher measures that might alienate voters who helped his Liberals win power, a source close to the matter said on Wednesday.

TSX futures rise as Syria tensions ease (Reuters) Futures for Canada’s main index were higher on Thursday as investor worries over a swift American military action in Syria eased following U.S. President Donald Trump’s latest comments. U.S. President Donald Trump amended on Thursday an earlier warning of a quick military strike against Syria in retaliation for a suspected chemical weapons attack on civilians, saying it “could be very soon or not so soon at all”.

NAFTA deal ‘not close at all’: Unifor’s Dias (BNN) Talk of an impending NAFTA deal is premature, Canadian union leader Jerry Dias said in Washington while officials were negotiating there Wednesday. The Unifor boss said he’s been in contact with the Canadian negotiating team and said speculation from some about an imminent agreement in principle is divorced from reality. The United States has been increasingly anxious to get something announced this month, before it becomes impossible for the rest of this year because of elections in Mexico and the U.S. Congress.

Overnight markets

Overview: US 10yr note futures are down -0.013% at 120-27, S&P 500 futures are up 0.51% at 2654.5, Crude oil futures are down -0.61% at $66.41, Gold futures are down -0.78% at $1349.4, DXY is up 0.25% at 89.796, CAD/USD is up 0.11% at 0.7941.

US Economic Data

Canadian Economic Data

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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market UpdateTsys higher in recent trade after Trump warned Russia of missile strikes in Syria, tsy yields 2-3bps lower, 10Y  2.77%.  US stock futures seeing further declines on the  news (S&P -22), USD index lower for a 4th day, crude extending yesterday’s 3.0% rally, up another 1.0%  @ 66.25.  Core Euro bonds higher led by 10Y gilts after weak IP data, 10Y bund yield at new low 0.49%, this despite a technically uncovered long auction (1.073bln bid/ 1.5bln offered).  Attention turns to US Mar CPI & FOMC minutes  for Mar 21 meeting.  CPI expected to be unch after a 0.2% increase in Feb, with the core 0.2% vs 0.2% Feb or 2.2% the highest since last March. GOCs higher, in line with tsys, 10Y 2.155%. BOC 3Y auction at noon – reopening of the 0.75% Sep 21 for $2.2bln with the S21/2Y roll 3.6bps. The bond has cheapened ~4bps on ASW to -35 over the last few sessions, which should support the auction, as well as the smaller size (2.2bln vs 2.5bln pre DMS.

News headlines

Rare Coalition Bands Together to Fight Trump Tariffs (Bloomberg) A rare coalition of business groups are banding together to fight President Donald Trump’s proposed tariffs, arguing they will hurt U.S. consumers and the economy. Retail, agriculture, technology, manufacturing and other industries say the tariffs on $150 billion in Chinese goods are counterproductive to the goal of holding Beijing accountable for intellectual property theft and other trade practices. The groups are working to keep specific products off the U.S. list and trying collectively to keep levies from being imposed at all.

Trump Tells Russia to ‘Get Ready’ for Missiles Coming at Syria (Bloomberg) President Donald Trump warned Russia to « get ready » because a volley of U.S. missiles would soon be sent into Syria in response to a suspected chemical weapons attack. “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!,” Trump wrote on Twitter. “You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”

Facebook’s Zuckerberg Earns Likes for Washington Performance (Bloomberg) Facebook Inc. Chief Executive Officer Mark Zuckerberg apologized, defended his company, and jousted with questioners while agreeing with others during his first-ever congressional testimony. Early reviews on his effort to restore trust with lawmakers and the public were mostly positive.

Fed Minutes to Hint at How Trade Spat Could Affect Outlook (Bloomberg) Federal Reserve policy makers have been publicly cautious about what a U.S. trade dispute with China could mean for their outlook if it escalates, but investors will get a peek at what they really think when the central bank publishes an account of its March meeting.

Syria Fears Hit Stocks Before U.S. Inflation Data: Markets Wrap (Bloomberg) Stocks faced a fresh wave of pressure on Wednesday as investors grappled with a slew of catalysts, chief among them the prospect of American military action in Syria. The dollar drifted and Treasuries climbed as traders also prepared for the latest U.S. inflation reading, and weighed the receding threat of a trade war.

Renters struggle to find homes as prices climb, availability declines (BNN) The Canada Mortgage and Housing Corp. says average rents nationally went up last year by 2.7 per cent to $947 per month. Meanwhile, the availability of rentals is becoming increasingly limited. The CMHC says the overall vacancy rate for cities across the country was three per cent in 2017, down from 3.7 per cent in 2016. In its annual report on rental housing, the corporation said the demand for purpose-built rental is outpacing the growth in supply, while the rate of condominiums rented out also declined.

IMF’s Lagarde warns global trading system risks ‘being torn apart’ (BNN) The world economy must avoid being sucked into a protectionist spiral that undermines the momentum of global growth, International Monetary Fund Managing Director Christine Lagarde said. The IMF remains optimistic about global growth prospects, Lagarde said Wednesday in a speech in Hong Kong ahead of next week’s annual spring meetings of the fund’s 189 member nations in Washington. The world economy is benefiting from surging investment, rebounding trade and favorable financial conditions, all of which are encouraging companies and households to step up spending, Lagarde said. 

Overnight markets

Overview: US 10yr note futures are up 0.168% at 120-31, S&P 500 futures are down -0.88% at 2631.75, Crude oil futures are up 1.3% at $66.36, Gold futures are up 0.6% at $1354, DXY is down -0.12% at 89.483, CAD/USD is up 0.14% at 0.7926.

US Economic Data

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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230