Commentaires

Market Update Tsys trade weaker, near overnight lows on avg volume in TY futures (240k), 10Y 2.87 (+1bp). USD recovering from earlier slide vs yen on BOJ deputy comments that they could adjust rates before inflation hit 2%, reports Trump to announce $60bln of import tariffs on China weighing on tsys, core EGBS. Gilts lower, despite weaker Feb CPI – 2.7% from 3.0% in Jan, mkt reacting more to Brexit transition and US tarrifs. GOCs  lower, outperforming tsys by 1-1.5bps,  Jan Wholesale Trade rose 0.1% vs 0.0% exp. Provis fairly rangebound, Ont 27s 59.5/59.

News headlines

China Pledges Action on Tech Transfer as Trump Plans Tariffs (Bloomberg) China made further promises to protect the intellectual property of foreigners investing in its economy, addressing a long-standing grievance as U.S. President Donald Trump plans new tariffs aimed at Beijing. Speaking Tuesday at the end of the annual National People’s Congress, Premier Li Keqiang said that China wants to avoid a trade war and that the government plans to further open the manufacturing sector — and that it won’t force foreign companies to transfer technology to domestic ones while doing so.

Disputes Stall Work on $1.2 Trillion Spending Bill in Congress (Bloomberg) Republican attempts to cobble together a comprehensive $1.2 trillion spending bill stalled late Monday, pushing House and Senate votes on the package closer to a deadline at the end of the work week to keep the government operating. Lawmakers, who’ve had a month to work out the details of a budget agreement aimed at ending a cycle of stopgap measures, blew past another target to finish their work as disagreements persisted over immigration, border security, tax breaks and a tunnel under the Hudson River between New York and New Jersey.

How Facebook Made Its Cambridge Analytica Data Crisis Even Worse (Bloomberg) Facebook Inc. tried to get ahead of its latest media firestorm. Instead, it helped create one. The company knew ahead of time that on Saturday, the New York Times and The Guardian’s Observer would issue bombshell reports that the data firm that helped Donald Trump win the presidency had accessed and retained information on 50 million Facebook users without their permission.

Bond Traders’ March Fed Guide: Beware the Four-Hike Hype So Soon (Bloomberg) For a Federal Reserve meeting at which an interest-rate hike is virtually guaranteed, the decision still holds plenty of market-moving potential for bond traders. That’s because new Federal Reserve Chairman Jerome Powell gave markets the impression last month that he’s open to tightening four times in 2018, rather than the three currently reflected in policy makers’ “dot plot” projections. Officials will update those forecasts this week, and Powell will hold a press conference, after his February signals encouraged a fresh round of U.S. yield-curve flattening.

Stocks Seek to Shrug Off Tech Woes; Dollar Climbs: Markets Wrap (Bloomberg) European stocks swung from a gain to a loss and back again and Asian equities nudged lower as investors sought to put the technology selloff behind them before a series of potentially market-moving events this week. The dollar rose with Treasury yields and the pound erased an advance. Trading was mixed and muted in equities across both Europe and Asia following Monday’s selloff, which was sparked by a series of negative tech stories including Facebook Inc.’s data issues and a fatal accident involving an Uber Technologies Inc. self-driving car. Still, both the European gauge and U.S. stock futures reversed declines, and contracts for the Nasdaq 100 eventually edged higher. Metals were once again under pressure, but Bloomberg’s broader index of raw materials increased.

Canada’s Trudeau says will discuss U.S. steel tariffs at Group of 7 meeting: Seoul (Reuters) Canada’s Prime Minister Justin Trudeau said steel tariffs will be discussed at the upcoming Group of 7 summit in June, South Korea’s presidential office said on Tuesday after Trudeau had a phone call with South Korean President Moon Jae-in. Trudeau was cited as saying Canada had been granted a temporary waiver on U.S. steel import tariffs and does not believe trade issues involving the United States have been resolved yet, the Blue House said.

Budget watchdog calls out Liberals for lack of details in budget plans (BNN) Parliament’s spending watchdog urged the federal government to come clean Thursday on billions of dollars’ worth of expenditure outlined in last month’s budget that includes little or no explanation — be it on infrastructure, programs for Canadians or the military. The Liberal government’s third budget, tabled late last month, showed billions in planned infrastructure spending was being shifted to future years. The document also showed declines in program spending totalling about $16 billion over six years, thereby reducing the government’s bottom line.

Overnight markets

Overview: US 10yr note futures are down -0.169% at 120-06, S&P 500 futures are up 0.16% at 2727, Crude oil futures are up 1.24% at $62.83, Gold futures are down -0.51% at $1311.1, DXY is up 0.46% at 90.18, CAD/USD is up 0.08% at 0.7641. 

US Economic Data

There is no US economic data for today.

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 US tsys weaker, yields 2-3bps higher with the 10Y 2.87 (+2.6bps), weighed by weakness in German bunds & UK gilts, with European stocks -0.60% and S&P futures -13.75. Euro spiking to 1.2315, bund yields +3bps  on Reuters story that several ECB members see progress on the outlook for inflation while economic developments could allow the ECB to end bond buying by the end of the year. Also BN survey revealed German growth expected to rise at the fastest rate since 2011.   Gilts sharply lower on report that transitional Brexit deal between EU & UK is close, 10Y gilt 1.50% (+7bps). Data calendar in the US is fairly light, FOMC decision and press conference should garner outsized attention as it is Powell’s first meeting as chairman, and the Fed is expected to raise rates by 25bps to 1.50-1.75%. GOCs opening weaker, underperforming tsys in 10s  as 2s10s is 3bps steeper. Provi supply expected to be quiet despite end of spring break, with provinces in blackout, Ontario budget set for March 28th.

News headlines

Stocks Slide in Broad Selloff; Brexit Spurs Pound: Markets Wrap (Bloomberg) Stocks declined globally on Monday as investors braced for a week packed with risk events, from central bank decisions to a G-20 gathering. Commodities were broadly weaker, Treasury yields rose and the pound jumped on hopes for a Brexit breakthrough. U.S. stock futures slumped, with contracts on the Nasdaq 100 Index off 1.4 percent, as technology companies were roiled by weekend reports of a Facebook Inc. data breach and news that Apple appears poised to disrupt its supply chain. That sapped Asian equities, while tech shares also led a retreat for the Stoxx Europe 600 Index. The gauge’s drop is set to trigger a trading pattern known as a “death cross,” a bearish sign for many technical analysts.

EU, U.K. Agree to Transition Deal: Brexit Update (Bloomberg) The U.K. and EU have reached a deal on the transition agreement that businesses are keen to get pinned down for the period immediately after Brexit. Brexit Secretary David Davis and chief EU negotiator Michel Barnier are in Brussels and are due to brief reporters at 11:45 a.m. London time. Leaders are expected to sign off on the agreement at a summit on Thursday and Friday.

Weakening FANG Stocks Stir Overnight Volatility in U.S. Futures (Bloomberg) A steady weakening in U.S. equity futures snowballed into one of the biggest drops in a month for Nasdaq 100 contracts, as pre-market trading revealed losses of around 1.5 percent in Apple Inc., Facebook Inc., Alphabet and Amazon.com. Facebook was in the spotlight as government officials in the U.S. and Europe were demanding answers from the company after reports that Cambridge Analytica, the advertising-data firm that helped Donald Trump win the U.S. presidency, retained information on tens of millions of Facebook users without their consent. Apple suppliers including Samsung and LG Display fell in Asia as the iPhone maker was said to be producing its own displays for the first time.

Oil Slips as U.S. Shale Fears Untempered by Russian Reassurance (Bloomberg) Oil slipped as U.S. explorers resumed their drilling binge, raising concerns over whether output cuts by OPEC and its allies will be enough to clear a glut despite a pledge from Russia that it’s committed to the curbs. Futures in New York fell 0.4 percent after data showed American producers added oil rigs for the seventh time in eight weeks. U.S. output also continued to grow, touching a record 10.4 million barrels a day last week. Meanwhile, Russia’s assurance that it will prolong production cuts into 2019 if necessary failed to assuage fears over surging shale supplies.

Hedge Funds Suffer Worst Month in Two Years (Bloomberg) Hedge Fund returns overall fell 2.19 percent in February, wiping out January gains and leaving them nearly unchanged for the year at up 0.07 percent, according to the latest numbers out of the Bloomberg Hedge Fund Database. That came as markets were roiled by a 47 percent jump in the VIX Index in the month, a 3.9 percent slide in the S&P 500 and as 10-year yields backed up to 2.86 percent, leading to the worst month for hedge funds since January 2016, when they slumped 2.57 percent.

Canadian pension fund CDPQ wants to be its own private equity investor (Reuters) Caisse de depot et placement du Quebec (CDPQ), one of Canada’s biggest public pension funds, has relied on private equity firms to invest in leveraged corporate buyouts. Now it is building its own investing team to depend less on buyout firms as middle men.

World stocks on longest slide since November as Fed caution hits (Reuters) Shares were stuck on their worst run since November on Monday, as caution gripped traders in a week in which the Federal Reserve is likely to raise U.S. interest rates and perhaps signal as many as three more hikes lie in store this year.

Loonie struggles to stabilize as traders brace for Powell’s remarks (BNN) The Canadian dollar was struggling to find a floor on Monday as it fell as low as 76.19 cents US before breaking into positive territory. The currency’s instability comes as traders brace for Jerome Powell’s first rate decision as U.S. Federal Reserve Chair on Wednesday. Trade uncertainty and soft domestic data have also been weighing on the loonie in recent weeks.  On Friday, the currency hit its lowest level since last June in the wake of a dovish speech by Bank of Canada Governor Stephen Poloz, weak housing data, and NAFTA tension.

Overnight markets

Overview: US 10yr note futures are down -0.169% at 120-05, S&P 500 futures are down -0.5% at 2742.25, Crude oil futures are down -0.26% at $62.18, Gold futures are down -0.09% at $1311.1, DXY is down -0.18% at 90.072, CAD/USD is down -0.21% at 0.7651. 

US Economic Data

There is no US economic data for today

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 mixed, slightly higher in the short end, with the 10Y 1bp lower @ 2.82%, on very light volume in TY (~200k). Data calendar is second tier – Feb Housing Starts &  Ind Prod as well as March Univ of Michigan Sentiment. EGBs higher in line with tsys, gilts outperforming. Eurozone inflation fell to 1.1% in Feb from 1.3%, below the 1.2% exp.  peripheral spreads continue to narrow with notable outperformance from 30Y Spanish & Italian bonds. There is no peripheral supply next week.  GOCs trading higher, in line with tsys, 10Y 2.13% low since early Jan, while GOC curve has flattened to new lows , 5bps since Poloz speech on Tuesday. Provi spreads fairly stable this week, Ontario credit curve flattening out to 10Y this week.

News headlines

White House Denies McMaster Is Next to Be Ousted (Bloomberg) President Donald Trump is not about to oust his national security adviser, H.R. McMaster, according to White House Press Secretary Sarah Huckabee Sanders, even as speculation intensified that McMaster’s departure had already been decided. Sanders tweeted on McMaster’s status late Thursday night following a Washington Post report that Trump had decided to replace the Army lieutenant general, who has led the National Security Council for more than a year. The Wall Street Journal later reported that Trump wants to remove McMaster and has conveyed his wishes to White House Chief of Staff John Kelly.

Irish Border Spat Complicates Brexit Transition Talks (Bloomberg) The U.K. has significant ground to make up on the Irish border issue before next week’s summit where it aims to clinch a deal on a Brexit transition period, European diplomats said. While both sides are keen have a deal signed off by EU leaders at the meeting, the gap on the Irish question remains wide, according to three diplomats, who asked not to be identified as talks are ongoing. If the EU isn’t satisfied with British proposals for avoiding a hard border, they might attach more conditions to a transition agreement, one of the officials said.

Aramco Gets Cool Response on IPO From U.S. Investors (Bloomberg) Saudi Arabia’s willingness to delay the initial public offering of state oil company Aramco to 2019 has several motivations, from regulatory risk to competing projects in the government’s crowded agenda. There’s another, perhaps more significant hurdle: it appears some American investors aren’t that interested.

Dollar Slips Amid Political Noise; Stocks Mixed: Markets Wrap (Bloomberg) The dollar edged lower and Treasuries gained as investors considered the potential for further churn of White House personnel. European stocks and U.S. futures drifted after Asian shares slipped, with equities traders showing little conviction.

After Tillerson, the Iran Deal Hangs By a Thread (Bloomberg) President Donald Trump’s decision to fire his top diplomat has put the Iran nuclear agreement at risk and cast new uncertainty on a meeting of the accord’s signatories. Diplomats from six world powers and Iran convened in Vienna on Friday to review the nuclear deal, called the Joint Comprehensive Plan of Action, which restricts the Persian Gulf country’s nuclear work in exchange for sanctions relief. It’s the last scheduled meeting of the group before Trump’s May 12 decision on whether the U.S. sticks to the accord.

Canada’s Trudeau ‘very optimistic’ of NAFTA win for all three countries (Reuters) Canadian Prime Minister Justin Trudeau said on Wednesday that he was “very optimistic” of a successful result for his country, the United States and Mexico as they renegotiate the North American Free Trade Agreement. Speaking in a Bloomberg TV interview in Regina, Saskatchewan, Trudeau said there was an “eminently achievable win-win-win” result available, and that NAFTA has been good for all three countries.

Loonie at lowest since last June amid murky trade outlook (BNN) The Canadian dollar fell to its lowest level since last June on Friday, as the currency hunts for a floor amid a host of factors that are weighing it down. The loonie was trading at 76.46 cents U.S. at 6:05 a.m. ET, more than five cents below its year-to-date high of 81.52, and extending a rough stretch that has seen the dollar post just five winning sessions since the middle of February.

Canada’s fourth quarter household debt-to-income nears record high (BNN) Canadian household debt as a share of income, a measure closely watched by policy makers, slipped slightly in the fourth quarter from a record high in the third quarter, Statistics Canada said on Thursday. The ratio of debt to disposable income dipped to 170.4 per cent from 170.5 per cent in the third quarter. Statscan revised the third quarter down from an initial 171.1 per cent.

Overnight markets

Overview: US 10yr note futures are down 0% at 120-16, S&P 500 futures are up 0.03% at 2756.25, Crude oil futures are up 0.23% at $61.33, Gold futures are up 0.22% at $1320.7, DXY is down -0.18% at 89.973, CAD/USD is up 0.22% at 0.7644. 

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