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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

Market Update

US & Cdn mkts slightly lower before US CPI/retail sales data, US 10Y 2.55%. EGBs mixed, bund curve continues to flatten in anticipation of ECB shift after yesterday’s minutes, while the Euro is at a three year high. JPM down ~1.0% pre mkt after earnings came in better than expected for the fourth quarter –  S&P futures +4.25. Provincial spreads closed wider for a second day, no supply this week. 

News headlines

An Inflation Breakout Would Be Worse for Markets Than a Depression (Bloomberg) Lowflation drove global markets to dizzying highs this year. Inflation could drive them off a cliff. The risk for 2018 is that consumer price growth stages a comeback, roiling investor portfolios and corporate profits, according to investors and strategists. The consequent return of higher real interest rates would imperil bullish market psychology more than you might think.

China Sets New Records for Gobbling Up the World’s Commodities (Bloomberg) China continues to gobble up the world’s commodities, setting new records for consumption of everything from crude oil to soybeans.

Merkel’s Bid to End German Gridlock Hangs on Crucial SPD Vote (Bloomberg) Chancellor Angela Merkel reached a preliminary accord with the Social Democrats to end Germany’s political gridlock, moving closer to a fourth term and defying domestic critics who say her time is running out.

Bitcoin Rebounds, Still Heads for Weekly Slump as Scrutiny Rises (Bloomberg) Bitcoin advanced on Friday for the first time this week as regulators around the world increased their scrutiny of the largest cryptocurrency, with concerns ranging from investor losses to strains on power systems.

JPMorgan profit beats on higher interest rates; debt trading down (Reuters) JPMorgan Chase & Co (JPM.N), the biggest U.S. bank by assets, reported a higher-than-expected quarterly profit on Friday as gains in net interest income offset a slowdown in trading revenue.

Chinese bitcoin miners eye sites in energy-rich Canada (Reuters) China’s Bitmain Technologies is eyeing bitcoin mining sites in Quebec, a company spokesman told Reuters, as expectations of a potential Chinese crackdown on cryptocurrency mining make the energy-rich Canadian province an attractive alternative.

Futures point to higher opening for TSX (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Friday, with March futures on the S&P TSX index SXFc1 up 0.19 percent at 7:15 a.m. ET.

Overnight markets

Overview: US 10yr note futures are down -0.089% at 123-01, S&P 500 futures are up 0.14% at 2773.5, Crude oil futures are down -1% at $63.16, Gold futures are up 0.82% at $1333.3, DXY is down -0.58% at 91.315, CAD/USD is up 0.03% at 0.7986.

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