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05/03/2018

by admin | Mar 5, 2018 | comments

Market Update US tsys trading higher, 10Y 2.84% (-2.5bps), heavy volume in TY futures (530k). The risk off move in tsys & bunds following the Italian election results has largely faded, with the German 10Y yield 2bps lower @ 0.623% after initially falling to 0.60% after news of a right wing coalition a and strong result from the 5-star movement. The USD index is higher, US equity futures -8.25. In Canada, GOCs are higher, outperforming tsys 1.5-2bps with the 10Y 2.15% (-4.5bps) and the CAD at a new 8 month low -74pps @ 1.2964 on stepped up Trump rhetoric on trade . Provis opening wider for a sixth day Ont 27s 63/62 , QC/Ont 48 -2/-2.5 unch. BOC rate decision Wednesday – BOC expected to be on hold this week while odds of a hike at the April meeting have fallen to ~35% from 53% a month ago. The CITI eco surprise index has seen a steep decline since the Jan 17th meeting, and this was before the threat of a trade war with the US.

News headlines

Trump Trade Crackdown Shows ‘America First’ Happening at Last (Bloomberg) President Donald Trump’s March 1 announcement that he’ll slap stiff tariffs on imported steel and aluminum roiled markets, spurred warnings of harsh economic and political ramifications from some Republican lawmakers, and provoked threats of retaliation from allies such as the European Union. Trump doesn’t intend to bow to pressure for exemptions for some nations when he signs the formal tariffs order as early as this week, according to two of his trade advisers, though there could be business exemptions in select cases.

Italy Populists Break Establishment Grip, Quest for Power Opens (Bloomberg) Italy’s anti-establishment groups surged in Sunday’s election as voters punished the mainstream parties for years of economic decline, rising taxes and a wave of immigration, casting doubt on the country’s future political direction.

China Turns Fiscal Screws While Maintaining 6.5% Red Line on GDP (Bloomberg) China stepped up its push to curb financial risk, cutting its budget deficit target for the first time since 2012 and setting a growth goal of around 6.5 percent that omitted last year’s aim for a faster pace if possible. The deficit target — released Monday as Premier Li Keqiang delivered his annual report to the National People’s Congress in Beijing — was lowered to 2.6 percent of gross domestic product from 3 percent in the past two years. The 6.5 percent goal is consistent with President Xi Jinping’s promise to deliver a “moderately prosperous” society by 2020.

Stocks Mixed as Trade War Looms; Italy Bonds Drop: Markets Wrap (Bloomberg) The threat of a global trade war loomed large over equities on Monday, with heavy losses across many Asian markets and U.S. futures trading lower even as European shares rose. The dollar edged higher and Treasuries gained, while Italian assets fell as the nation faced a hung parliament.

IEA Sees American Energy Dominance Squeezing OPEC Into 2020s (Bloomberg) The U.S. will dominate global oil markets for years to come, satisfying 80 percent of global demand growth to 2020 as the shale boom keeps OPEC under pressure, the International Energy Agency said.

Key U.S. lawmaker urges steel tariff exemptions for NAFTA allies (Reuters) An influential U.S. lawmaker said on Sunday all fairly traded steel and aluminum, especially from Canada and Mexico, should be excluded from President Donald Trump’s proposed tariffs, as he sought to calm tensions at major trade talks in Mexico.

TSX futures dip on trade war threat (Reuters) March futures on the S&P TSX index were down 0.19 percent at 7:15 a.m. ET. Canada’s main stock index slipped to a two-week low on Friday, ending the week with a 1.6 percent decline, as the trade war threat weighed on energy and industrial shares. Dow Jones Industrial Average e-mini futures were down 0.20 percent at 7:15 a.m. ET, while S&P 500 e-mini futures were down 0.20 percent and Nasdaq 100 e-mini futures were up 0.12 percent.

CN launches search for new CEO after abrupt exit by Luc Jobin (BNN) CN Rail () is hunting for a new chief executive officer after the abrupt exit of Luc Jobin. The rail company announced Jobin’s departure early Monday morning, saying it’s effective immediately. Jobin is being replaced on an interim basis by Chief Marketing Officer Jean-Jacques Ruest until a permanent chief executive is selected.

Overnight markets

Overview: US 10yr note futures are up 0.143% at 120-12, S&P 500 futures are down -0.23% at 2684, Crude oil futures are up 0.03% at $61.27, Gold futures are up 0.05% at $1324.1, DXY is up 0.18% at 90.097, CAD/USD is up 0.39% at 0.7732.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.741%	2 Year	2.222%
5 Year	1.982%	5 Year	2.601%
10 Year	2.17%	10 Year	2.841%
30 Year	2.34%	30 Year	3.127%

US Economic Data

9:45 AM	Markit US Services PMI, Feb est 55.9 (55.9 prior)
	Markit US Composite PMI, Feb (55.9 prior)
10:00 AM	ISM Non-Manf. Composite, Feb est 59.0 (59.9 prior)

Canadian Economic Data

7:00 AM	MLI Leading Indicator MoM, Jan 0.4% (0.5% prior)
10:00 AM	Bloomberg Nanos Confidence, Mar 2^nd (58.2 prior)

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

02/03/2018

by admin | Mar 2, 2018 | comments

Market Update Tsys trading mixed, slightly higher in the short end on strong volume in TY futures (520k), 10Y 2.81% (unch). Light data calendar with only Univ of Michigan Sentiment, so focus will remain on equities which are looking weaker with the Euro stoxx -1.9%, S&P futures extending yest losses, -20 pts. The USD index down for a second day, down ~1.0% since Trump announced steel & aluminum tariffs yest afternoon, USDJPY at a new low for the cycle , Kuroda said the BOJ is considering exiting its easy mon policy if target inflation is achieved by next yr. GOCs higher, outperforming tsys by 1bp before Dec GDP, CAD weaker 1.2876 approaching 1.29 support from late Dec. Provi spds another 1-2 bps wider yest on ‘risk off’ as well as competition from heavy corp supply.

News headlines

Trump Says Trade Wars Are ‘Good, and Easy to Win’ (Bloomberg) President Donald Trump pushed back against a wave of criticism against steel tariffs, telling the world that not only are trade wars good, they are easy to win. Trump is facing anger from manufacturers and trade partners in China and Europe after announcing tariffs of 25 percent on imported steel and 10 percent on aluminum for “a long period of time.” The formal order is expected to be signed next week.

Stocks Sink, Bonds Rally on Trump’s Metals Duties: Markets Wrap (Bloomberg) U.S. stocks plunged and Treasuries climbed Thursday after U.S. President Donald Trump promised to impose substantial tariffs on foreign metals, drawing a rebuke from a manufacturing industry group and the European Commission.

Brexit Talks in Peril After May Rejects EU Draft Deal (Bloomberg) U.K. Prime Minister Theresa May vowed she will never accept a draft Brexit agreement published by the European Union on Wednesday, raising the prospect that the negotiations are heading for a breakdown. The pound fell. The EU commission set out in minute detail how it wanted to arrange Britain’s withdrawal, but key passages on avoiding new customs checks at the U.K.’s land border with Ireland made the 118-page draft impossible for May to support. It proposes keeping Northern Ireland in the bloc’s customs union, under the jurisdiction of the European Court of Justice — both of which May wants the whole of the U.K. to leave.

Four Possible Outcomes in Italy’s Election This Weekend (Bloomberg) Italy is long used to managing political instability, but giving birth to the country’s 65th government since World War II looks a particularly tough order. With Sunday’s election forecast to produce a hung parliament, weeks of political uncertainty could hang over an economy burdened with a feeble recovery and a public debt mountain.

Unhappy Canada vows to retaliate against any U.S. steel tariffs (Reuters) Canada will retaliate against any U.S. tariffs on steel and aluminum products, officials said on Thursday, as Ottawa faced what could be one of the biggest economic threats since Donald Trump became president. Trump unveiled the tariffs on Thursday but did not make clear whether they would apply to Canada and Mexico, which together with the United States are trying to renegotiate the 24-year-old North American Free Trade Agreement.

TSX futures down on trade war fears, lower oil prices (Reuters) A day after announcing steep tariffs on imports of steel and aluminum, U.S. President Donald Trump tweeted that“trade wars are good, and easy to win”. March futures on the S&P TSX index were down 0.31 percent at 7:15 a.m. ET. Canada’s gross domestic product report for the fourth quarter is due at 8:30 a.m. ET. The country’s economy likely cooled in the second half of last year, with analysts expecting the annualized report to come in below the Bank of Canada’s 2.5 percent forecast.

Canadian commercial real estate sees record investments in 2017: CBRE (BNN) The Canadian commercial real estate market set another record for investments in 2017 and was one of only four countries in the world to do so, according to a new report from CBRE Ltd. The report said there were more than $43.1 billion in investments last year, surpassing $34.7 billion in 2016, and CBRE predicts another record will be established in 2018. CBRE said strong tenant demand, coupled with declining vacancy rates which are at, or near, all-time lows in many Canadian markets, will lead to strong increases in rental rates.

Overnight markets

Overview: US 10yr note futures are down -0.039% at 120-18, S&P 500 futures are down -0.73% at 2658.75, Crude oil futures are down -0.64% at $60.6, Gold futures are up 1.33% at $1322.6, DXY is down -0.37% at 89.991, CAD/USD is up 0.28% at 0.7768.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.752%	2 Year	2.214%
5 Year	1.985%	5 Year	2.578%
10 Year	2.16%	10 Year	2.81%
30 Year	2.321%	30 Year	3.097%

US Economic Data

10:00 AM	U. of Mich. Sentiment, Feb est 99.5 (99.9 prior)
	U. of Mich. Current Conditions, Feb (115.1 prior)
	U. of Mich. Expectations, Feb (90.2 prior)
	U. of Mich. 1 Yr Inflation, Feb (2.7% prior)
	U. of Mich 5-10 Yr Inflation, Feb (2.5%)

Canadian Economic Data

8:30 AM	GDP MoM, Dec est 0.1% (0.4% prior)
	GDP YoY, Dec est 3.3% (3.5% prior)
	Quarterly GDP Annualized, 4Q est 2.0% (1.7% prior)

Disclosure and Disclaimer

Ivan Greenstein, Stephan Buu, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

01/03/2018

by admin | Mar 1, 2018 | comments

Market Update Tsys trading higher, 10Y 2.83 (-3bps), ‘risk off’ rally with European equities down 1.0%, US equity futures also lower (S&P -7.5), the USD index higher for a 3rd day , the euro below 1.22 the lowest since Jan 12th. Fed chair Powell’s second day of testimony before the US senate, as well as PCE, ISM data. Core EGBs also higher, 10Y gilt 5bps lower @ 1.45% underpinned by Brexit concerns, despite smaller than exp decline in UK manufacturing and strong mortgage approval data. GOCs higher, underperforming tsys ,10Y below 2.20% lowest since jan 18th. Provis opening 0.5bps wider , supply expected from Alberta after fiscal update – deficit for this FY 9.1bln vs 10.3bln in Q2 update. In corps , primary supply yest with $750mln GS July 2022 FRN @ 54, closed 53/51. Heathrow issued $400mln 10Y Maple @ 115.

News headlines

Global Stocks Slide, Treasuries Rise Before Powell: Markets Wrap (Bloomberg) European shares dropped the most since a global rout last month following sharp declines in Asia. Treasuries climbed and the dollar jumped to the highest since January as traders awaited a second appearance from Federal Reserve Chairman Jerome Powell, whose comments riled markets earlier this week.

Trump Expected to Announce Stiff Steel, Aluminum Tariffs (Bloomberg) President Donald Trump is set to announce steep tariffs on steel and aluminum imports Thursday, people familiar with the matter said, in what would be one of his toughest actions yet to implement a hawkish trade agenda that risks antagonizing friends and foes alike.

Tusk to May: Don’t Expect Frictionless Trade After Brexit (Bloomberg) European Union President Donald Tusk warned the U.K. that it can’t expect frictionless trade outside the bloc’s single market, lowering again Prime Minister Theresa May’s expectations a day before she’s due to deliver a major speech on her vision for the post-Brexit relationship.

U.K. Manufacturing Loses Steam Amid Brexit Worry (Bloomberg) U.K. manufacturing lost a bit of steam last month, with growth slipping to an eight-month low. IHS Markit’s manufacturing Purchasing Managers Index eased to 55.2 from 55.3 in January. While the figure was better than forecast and still implies expansion, Markit said it suggests a “marked downshift” in the pace of growth so far this year.

Futures flat ahead of Powell’s testimony (Reuters) Futures for Canada’s main stock index were little changed on Thursday, as U.S. Federal Reserve chairman Jerome Powell is set to continue his testimony to lawmakers later in the day. Financial markets barely moved on Tuesday when Powell made his initial public statements as Federal Reserve chief, but the calm evaporated a few hours later, when Powell, testifying before a U.S. House of Representatives committee, struck a bullish, and personal, tone on the strength of the economy.

TD Bank sails past Q1 profit estimates, boosts dividend (BNN) Toronto-Dominion Bank sailed past first-quarter profit expectations, prompting its CEO to hint the bank could be on pace to top its internal targets this year. Adjusted profit in the three months ending Jan. 31 rose to $2.95 billion from $2.56 billion a year earlier. On a per share basis, TD earned $1.56. Analysts were expecting $1.46 in adjusted earnings per share.

CSX reaffirms plan to boost profitability (BNN) U.S. railroad operator CSX Corp on Thursday reaffirmed that it would lower its operating ratio by 2020, ahead of its first investor day after the death of former Chief Executive Officer Hunter Harrison. The company said it would post an operating ratio of 60 per cent by 2020 and revenue growth at a compound annual rate of 4 per cent in 2019 and 2020.

Overnight markets

Overview: US 10yr note futures are up 0.286% at 120-13, S&P 500 futures are down -0.33% at 2705.5, Crude oil futures are down -0.96% at $61.05, Gold futures are down -0.86% at $1306.6, DXY is up 0.25% at 90.837, CAD/USD is up 0.23% at 0.7775.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.77%	2 Year	2.238%
5 Year	2.021%	5 Year	2.607%
10 Year	2.205%	10 Year	2.83%
30 Year	2.357%	30 Year	3.103%

US Economic Data

8:30 AM	Personal Income, Jan 0.4% est 0.3% (0.4% prior)
	Personal Spending, Jan 0.2% est 0.2% (0.4% prior)
	Real Personal Spending, Jan -0.1% est -0.1% (0.3% prior)
	PCE Deflator MoM, Jan 0.4% est 0.4% (0.1% prior)
	PCE Deflator YoY, Jan 1.7% est 1.7% (1.7% prior)
	PCE Core MoM, Jan 0.3% est 0.3% (0.2% prior)
	PCE Core YoY, Jan 1.5% est 1.5% (1.5% prior)
	Initial Jobless Claims, Feb 24^th 210k est 225k (222k prior)
	Continuing Claims, Feb 15^th 1931k est 1925k (1875 prior)
9:45 AM	Bloomberg Consumer Comfort, Feb 25^th (56.6 prior)
	Markit Manufacturing PMI, Feb est 55.9 (55.9 prior)
10:00 AM	Construction Spending MoM, Jan est 0.3% (0.7% prior)
	ISM Manufacturing, Feb est 58.7 (59.1 prior)
	ISM Employment, Feb (54.2 prior)
	ISM Prices Paid, Feb est 70.0 (72.7 prior)
	ISM New Orders, Feb (65.4 prior)
03/01	Wards Domestic Vehicle Sales, Feb est 13.30m (13.10m prior)
	Wards Total Vehicle Sales, Feb est 17.20m (17.07m prior)