Commentaires

Market Update US tsys  slightly lower, US 10Y 2.707% (+1.3bps), after moving above 2.73% overnite, prices seeing some support as equities weaken for a second day with S&P futures -12.5. Bund curve steeper, 10Y unch after weaker than exp German Jan CPI (1.6% vs 1.7%). GOCs lower in line with tsys, 10Y 2.295% , long outperformance bringing 10s30s below 6bps. Provis ~0.5bp narrower yest, expectations for long supply (Ont, QC, MP) – Ont 27/48 credit curve 2bps wider over the last week yet issuing longs here very attractive option given ~20bp narrowing in underlying GOC curve. National Bank issued $750MM 10NC5 NVCC @ 110.9 yest, closing 112/110. 

News headlines

Euro-Area Economy Posts Strong 2017 Finish Buoyed by ECB (Bloomberg) The euro-area economy finished off last year with another quarter of robust growth, and confidence among businesses and households suggests there’s no slowdown in sight. Gross domestic product rose 0.6 percent in the three months through December, in line with forecasts and marking a 19th straight expansion. The French and Spanish economies, two of the bloc’s largest, both recorded similarly solid rates of growth.

Stocks Fall Most in 2018 as Treasury Yields Climb: Markets Wrap (Bloomberg) The Standard & Poor’s 500 Index declined by the most since September and yields on benchmark Treasuries touched the highest levels since early 2014 as traders gear up for a hectic week of data and policy announcements. The dollar strengthened against all its major rivals.

Trump’s Agenda Faces Tough Fiscal Reality After State of the Union (Bloomberg) President Donald Trump plans to promote the Republican tax overhaul he signed into law in his first State of the Union speech on Tuesday night, but fiscal headwinds mean he’s likely to have less legislative success in his second year in office.

U.S. Names Oligarchs, Kremlin Elite But Avoids New Sanctions (Bloomberg) The U.S. identified 210 Russian billionaires and top officials in a sweeping list required under last summer’s sanctions law, but underlined that those named aren’t being targeted for new restrictions.

U.K. Consumer Confidence Increases as New Year Brings Hope (Bloomberg) Britons are starting 2018 with renewed optimism as a measure of consumer confidence rose by the most in a year in January. The jump was driven by the biggest increase in households’ assessment of their financial position in the past month since November 2014, according to YouGov and the Centre for Economics and Business Research. The firms’ overall index of sentiment climbed to 108.2 in January, from 107.1 previously.

Blackstone in talks to buy majority stake in key Thomson Reuters unit (Reuters) U.S. private equity firm Blackstone Group LP is in advanced talks to buy an approximate 55 percent stake in the Financial and Risk business of Thomson Reuters Corp, a deal that would value the unit at about $20 billion including debt, three sources familiar with the matter said on Monday.

Amazon, Berkshire, JPMorgan team up to lower ‘hungry tapeworm’ healthcare costs (BNN) Amazon.com Inc (AMZN.O), Berkshire Hathaway (BRKa.N) and JPMorgan Chase & Co. (JPM.N) are teaming up in a new venture aimed at lowering healthcare costs for their U.S. employees, the companies said on Tuesday. The companies will create an independent firm « free from profit-making incentives and constraints » that will initially focus on technology solutions to provide employees and their families with healthcare « at a reasonable cost. »

Canada’s economy going from a ‘sprint to a marathon’ pace (CBC) The Canadian economy’s surprising run for most of 2017 will likely start to decelerate this year as the country reaches its peak capacity for rapid growth, experts say. Gross domestic product (GDP) figures for November, to be released Wednesday, are expected to show the Canadian economy grew 0.4 per cent from the previous month.

Overnight markets

Overview: US 10yr note futures are down -0.077% at 121-23, S&P 500 futures are down -0.39% at 2842.25, Crude oil futures are down -0.85% at $65, Gold futures are up 0.19% at $1347.7, DXY is down -0.2% at 89.126, CAD/USD is down -0.21% at 0.8121.

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

Market Update

Global govt bonds selling off this morning, US tsy& bund yields 3-6bps higher, muted rise in gilt yields 0.5-2bps. Tsy yields easily breaching resist,  10s above 2.70% for the first time since April 2014 on heavy volume in TY futures (>860k), despite month end extensions, FOMC/labor mkt data, and the potential for rebalancing out of equities into tsys.  Slight uptick in tsy after Personal Income/Spending data. GOCs lower, outperforming tsy by 102 bps, longs outperforming – 6bps vs tsys over the week with 5s & 10s unch. 

News headlines

German Five-Year Yield Rises to Highest Level in Over Two Years (Bloomberg) German five-year bond yields broke above zero percent for the first time since December 2015 after a member of the European Central Bank Governing Council said there isn’t a single reason anymore to continue with quantitative easing.

Treasuries Slide, Dollar Gains as Busy Week Begins: Markets Wrap (Bloomberg) U.S. Treasuries extended a selloff that’s taken yields to the highest since early 2014 as traders gear up for a hectic week of data and policy announcements. The dollar climbed and stocks edged lower as the euro, Swiss franc, yen and pound all retreated.

British Lords Get Ready to Disrupt Brexit (Bloomberg) The bumpy journey toward Brexit reaches another fork in the road this week as the upper chamber of the British parliament plans to rewrite a key piece of Prime Minister Theresa May’s legislation.

Hedge Funds Are Betting Big on Oil (Bloomberg) Hedge funds reported record wagers on continued price increases for both U.S. and global oil benchmarks, along with gasoline and diesel. Meanwhile, producers are hedging production at record rates as oil experiences its best January since 2006.

Russian Bonds Retreat Before Long-Awaited U.S. Sanctions Report (Bloomberg) Russian bonds slid, with some yields climbing to the highest in two months, and UBS Group AG recommended taking profit on the ruble before a U.S. Treasury report gauging the impact of possible sanctions on the nation’s sovereign debt.

U.S. lawmakers at NAFTA talks express optimism about modernizing trade pact (Reuters) U.S. lawmakers attending NAFTA talks in Montreal expressed optimism on Sunday that efforts to update the trade pact would avoid collapse and start gaining momentum and said they urged negotiators not to bind themselves to a specific deadline.

U.S. trade body backs Canadian plane maker Bombardier against Boeing (Reuters) A U.S. trade commission on Friday handed an unexpected victory to Bombardier Inc against Boeing Co, in a ruling that allows the Canadian company to sell its newest jets to U.S. airlines without heavy duties, sending Bombardier’s shares up 15 percent.

ICBC posts $935M in net losses in first nine months of fiscal year (BNN) The financial crisis at British Columbia’s public auto insurer is deepening, as $1.3 billion in net losses are now projected by the end of the current fiscal year. The Insurance Corporation of B.C. said the « sizable and significant loss » is evidence of the growing financial pressures from a rapid increase in the number of collisions in the province, as well as the rising costs of those claims.

Overnight markets

Overview: US 10yr note futures are down -0.32% at 121-22, S&P 500 futures are down -0.24% at 2867.5, Crude oil futures are down -0.7% at $65.68, Gold futures are down -0.69% at $1347.9, DXY is up 0.32% at 89.348, CAD/USD is up 0.16% at 0.8105.

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 weaker, 10Y 2.64%,(+2.4bps), above avg volume in TY futures, reversing some of yest late aft rally. Equities firmer (S&P fut + 9.25), gold higher, crude unch 65.60 , USD weaker reversing Trump bounce on Trump. Tsys lower with bunds after Draghi sounded optimistic on EU growth , while ECB member Coeure noted inflation is picking up  with wages, while the ECB remains data dependent.  GOCs lower in line with tsys, 10Y 2.26%, longs continue to outperform on the curve 10s30s @ 8bps, the flattest relative to the US since October.  Provincial spds unch yest, longs 1bp wider as the GOC curve narrows. Dollarama in the mkt with a 3Y FRN @ 27 yest, now 25/23. 

News headlines

Trump Woos CEOs in Davos Debut While Others Consider Boycott (Bloomberg) It was a scene more reminiscent of President Donald Trump’s own Cabinet meetings than a staid forum of global elites in the Swiss Alps: Trump, at a table of top executives from Europe’s most important companies, holding court as they took turns trying to impress him.

Trump Says Dollar to Strengthen, Mnuchin ‘Taken Out of Context’ (Bloomberg) President Donald Trump declared that the dollar would continue to strengthen and that remarks made by his Treasury secretary suggesting support for a weaker U.S. currency the day before had been taken out of context.

U.K. Economy Remains a Laggard Even as GDP Beats Forecasts (Bloomberg) The 0.5 percent expansion in the fourth quarter announced on Friday was better than the 0.4 percent forecast by economists in a Bloomberg survey. For the full year, growth slowed to 1.8 percent, the weakest in five years, as consumers and companies felt the repercussions of the 2016 vote to the leave the European Union.

Trump Rallies Dollar as Stocks Wobble, Crude Falls: Markets Wrap (Bloomberg) President Donald Trump waded into the unusual public debate over currency valuations, roiling markets after he said that he favored a strong greenback just a day after his Treasury secretary endorsed a weak dollar.

Oil Set for Weekly Gain as Crude Stockpiles and Dollar Decline (Bloomberg) Futures have climbed 3.8 percent in New York this week after reaching the highest since December 2014 on Thursday. Crude stockpiles fell for a 10th week to the lowest level since February 2015, according to Energy Information Administration data Wednesday. The weaker dollar has made oil more attractive to investors.

Bombardier expected to lose U.S. trade dispute: Canadian government source (Reuters) Planemaker Bombardier Inc is expected to lose a hotly contested U.S. trade dispute this week, a Canadian government source told Reuters on Thursday, likely inflaming tensions between the two countries during talks to modernize NAFTA.

World stocks set for 10th straight week of gains, euro jumps (Reuters) World stocks were set for their 10th straight week of gains on Friday, while the euro jumped more than half a percent as comments by U.S. officials this week advocating their support for a weak dollar reverberated through currency markets.

Dividend increases predicted as energy companies prepare 4th-quarter reports amid oil price rebound (CBC) A rally in oil prices that started late last year and shows no signs of stopping in 2018 is expected to pave the way for bigger payouts for long-suffering Canadian energy investors as fourth-quarter reporting season gets underway in the next month.

Overnight markets

Overview: US 10yr note futures are down -0.166% at 122-08, S&P 500 futures are up 0.33% at 2850.75, Crude oil futures are up 0.05% at $65.54, Gold futures are down -0.91% at $1355.6, DXY is down -0.37% at 89.057, CAD/USD is down -0.52% at 0.8123.

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