Commentaires

Market Update

Tsys weaker, yields up 1-2 bps with the long end outperforming, 10Y 2.557% (+2bps), equities slightly lower in Europe while S&P futures are +9.75 while the USD index is higher after falling to a three year low yesterday – dovish comments from ECB members Contancio & Nowotny undercut earlier EUR strength above $1.23. GS Q4 earnings beat yet the stock 0.8% lower, FICC revenues fell 50%, overall trading fell 34% vs -22% consensus Core Euro bonds higher, Eurozone inflation in line with expectations, German 30Y bund auction saw solid demand even as the 10s30s bund curve has collapsed over the past week from 85 to 72 a low since last April.  In Canada, GOCs lower, outperforming tsys across the curve . BOC rate decision & MPR at 10:00, a 25bp hike widely expected with OIS pricing in ~80% odds. Citi pricing a three tranche deal today – 5NC4 fixed-floater, 5NC4 FRN and a 21NC20. The 5NC4 fixed guidance @ 87.5 looks ~6bps cheaper to the C 3.39 21 Maple. 

News headlines

House GOP Bid to Avert Shutdown Gains Steam as Deadline Nears (Bloomberg)  House Republicans are coalescing around a plan to try and force the Senate to accept a short-term spending bill this week that doesn’t address immigration issues and other demands from Democrats in order to avoid a government shutdown after Jan. 19.

Bitcoin Adds to Slump That Shook Global Cryptocurrency Market (Bloomberg) Bitcoin slowed its decline on Wednesday in the wake of a 23 percent plunge that rocked the global market for digital assets and sparked deeper questions about its future. The biggest cryptocurrency slid 2.2 percent to $10,487 as of 12:28 p.m. in London, giving up an earlier 10 percent gain and approaching the $10,000 level not seen since December. Its tepid resilience helped buoy other large cryptocurrencies, with ripple and ethereum fluctuating with single-digit gains and losses.

Goldman’s Commodity Revenue Drops 75% to Lowest on Record (Bloomberg) Goldman Sachs Group Inc. suffered the worst annual commodities performance in its history as a public company as a drop of about 75 percent in net revenue in 2017 put it behind long-time rival Morgan Stanley, according to people familiar with the matter.

Stock Gains Ease as Dollar Strengthens; Oil Slips: Markets Wrap (Bloomberg) European stocks struggled for traction following declines for many Asian peers as the earnings season got into full swing. U.S. futures rallied along with the dollar, and gold extended Tuesday’s drop.

Currency Traders Brace for Possible ‘Hawkish Hold’ by Bank of Canada (Bloomberg) Foreign-exchange traders who had all but priced in a Bank of Canada rate hike are suddenly paying up to hedge against the risk of a letdown at Wednesday’s policy meeting.

Stocks pull back from record highs, set for second day of losses in new year (Reuters) World shares pulled back from record highs on Wednesday, set for only their second day of losses in the new year as lower commodity prices and a string of downbeat updates from companies dampened the mood in global markets.

Bank of America profit slumps on $2.9 billion tax charge (Reuters)  The lender’s net income fell to $2.37 billion, or 20 cents per share, for the quarter ended Dec. 31 from $4.54 billion, or 39 cents per share, in the year earlier period.

Overnight markets

Overview: US 10yr note futures are down -0.127% at 122-27, S&P 500 futures are up 0.34% at 2792, Crude oil futures are down -0.11% at $63.66, Gold futures are down -0.08% at $1336, DXY is up 0.41% at 90.763, CAD/USD is up 0.01% at 0.8041.

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 trading firmer, near top of o/n range on heavy volume (>500k), 10Y 2.533% (-1.3bps), curve 1.5bps flatter. Tsys lagging the rally in bunds – ECB not planning changes to bond purchase plan until March according to Reuters. Gilts higher, steeper after CPI fell in Dec to 3.0% from 3.1%, core 2.5% vs 2.6% exp.  European equities stronger, S&P fut + 12.25 , CITI Q4 eps beat $1.20 vs $1.19, $18.3bln overall loss fur to $22bln charge due to writeoff of deferred tax assets, shares are up  ~3% pre-mkt.  In Canada, GOCs opening slightly higher out to 10s, longs better bid on the curve 10s30s @17.5bps new low, in line with outperformance of long tsys since Sep. Provis wider yest again, ~4bps off the lows of last Tuesday – Ont 27s 59/58.5. Supply expected today from Ontario/Mani before BOC tomorrow. JPM in the US mkt with 2 tranche 11NC10 and 31NC30 at 100-105 & 115.   The USD JPM 3.625 12/27 swaps back at CAD+ 133 so the new 11NC10 looks fair at T+105 (CAD +135).

News headlines

GOP Sees Possible DACA Deal as Trump Bemoans Sticking Points (Bloomberg) Republican lawmakers held out hope that a deal can be reached allowing young undocumented immigrants to remain in the U.S., despite President Donald Trump saying the effort is “probably dead” amid growing tensions about keeping the government funded past Friday.

Bitcoin Tumbles 20% as Fears of Cryptocurrency Crackdown Linger (Bloomberg) January’s cryptocurrency selloff got fresh impetus on Tuesday when bitcoin slumped, plunging as much as 20 percent as the prospect of regulatory crackdowns appeared to spread.

Dollar Climbs as Euro, Pound Drop; Stocks Advance: Markets Wrap (Bloomberg) The U.S. dollar strengthened on Tuesday, rebounding from its lowest close in three years to gain versus the yen, euro and pound. European stocks and government bonds advanced, while most commodities including gold turned lower.

U.K. Inflation Slows as BOE Policy Maker Tenreyro Shifts Dovish (Bloomberg) U.K. inflation eased for the first time in six months in December, which may be the start of a slowdown that will ease pressure on consumers who spent 2017 being squeezed by rising prices.

Shares stay on record run, metals suffer meltdown (Reuters) Asia and Europe’s big bourses kept world shares on their record-breaking run on Tuesday, though a steadier dollar halted the sizzling start to the year for the euro, yen and yuan and sent metals markets sprawling.

TSX futures rise; tracking global shares (Reuters) Stock futures pointed to a slightly higher open for Canada’s main stock index on Tuesday tracking gains in global shares, despite a dip in the price of metals and crude.

Overnight markets

Overview: US 10yr note futures are up 0.102% at 123-02, S&P 500 futures are up 0.41% at 2800.25, Crude oil futures are down -0.37% at $64.06, Gold futures are up 0.1% at $1336.2, DXY is down -0.38% at 90.627, CAD/USD is down -0.04% at 0.8048.

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

US cash markets closed for MLK holiday, with very low volume in TY futures (~95k). The USD index under pressure, close to a three-year low. Core Euro bonds mixed, UK gilts higher, flatter on rise in political risk as UK construction firm Carillion filed for bankruptcy. GOCs unch, 10Y 2.17%, ~5bps off the highs of last Wednesday which was the highest since Sep 14, with longs outperforming possibly due to the relative lack of long provi/corp supply so far this year. We expect the BOC to hike rates this week despite NAFTA headlines – the latest BOC Business Outlook Survey reflected increasing capacity & wage pressures, while the overall BOS indicator bouncing back almost to its peak of last summer, this is in line with the BOC’s own view of a rapidly tightening labor market and rising inflation.

News headlines

Dollar Slide Deepens as Euro Strength Saps Stocks: Markets Wrap (Bloomberg) Despite the U.S. holiday, the dollar dominated trading on Monday as it headed for a fourth day of declines, weakening against almost every major currency. The euro’s jump weighed on European stocks, while gold gained.

Ford Goes ‘All In’ on Electric Cars (Bloomberg) Ford Motor Co. will more than double spending on electrified vehicles, amplifying its investment in a segment that the auto industry sees growing from what’s now just a fraction of the market.

U.S. inflation jumps, boosting likelihood of rate hike (CBC News) Underlying U.S. consumer prices saw their biggest jump in 11 months in December, boosting expectations that inflation will keep the Federal Reserve on the path of raising interest rates.

Royal Bank, TD and CIBC raise their fixed 5-year mortgage rates (CBC News) Three of Canada’s biggest banks have hiked the rate on their benchmark five-year mortgage, and more are expected to follow suit. The Royal Bank of Canada raised its posted rate for a five-year, fixed-rate mortgage by 15 points to 5.14 per cent, the bank confirmed to CBC News in an email.

Final Sears Canada stores shuttered for good (CBC News) All remaining Sears Canada stores will close their doors for good on Sunday, including 17 in Ontario. The department store chain had been in business in Canada since 1953, but struggled in recent years to adapt to the internet age and a changing retail environment.

TSX futures lower as oil prices slip (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Monday as oil slipped on signs that production cuts by OPEC and Russia are tightening supplies.

Overnight markets

Overview: US 10yr note futures are up 0.051% at 123-00, S&P 500 futures are up 0.16% at 2793.25, Crude oil futures are down -0.08% at $64.25, Gold futures are up 0.55% at $1342.3, DXY is down -0.61% at 90.416, CAD/USD is down -0.24% at 0.8044. 

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