Commentaires
12/01/2018
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.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.758% | 2 Year | 1.985% |
| 5 Year | 1.967% | 5 Year | 2.33% |
| 10 Year | 2.174% | 10 Year | 2.546% |
| 30 Year | 2.384% | 30 Year | 2.869% |
US Economic Data
| 8:30 AM | CPI MoM, Dec est 0.1% (0.4% prior) |
| CPI Ex Food and Energy MoM, Dec est 0.2% (0.1% prior) | |
| CPI YoY, Dec est 2.1% (0.1% prior) | |
| CPI Ex Food and Energy YoY, Dec est 1.7% (1.7% prior) | |
| CPI Index NSA, Dec est 246.372 (246.669 prior) | |
| CPI Core Index SA, Dec est 254.333 (253.724 prior) | |
| Retail Sales Advance MoM, Dec est 0.5% (0.8% prior) | |
| Retail Sales Ex Auto MoM, Dec est 0.3% (1.0% prior) | |
| Real Avg Weekly Earnings YoY, Dec (0.8% prior) | |
| Real Avg Hourly Earning YoY, Dec (0.2% prior) | |
| 10:00 AM | Business Inventories, Nov est 0.4% (-0.1% prior) |
Canadian Economic Data
| 8:30 AM | Teranet/National Bank HP Index, Dec (217.0 prior) |
| Teranet/National Bank HPI MoM, Dec (-0.5% prior) | |
| Teranet/National Bank HPI YoY, Dec (9.2% 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
11/01/2018
Market Update
Tsys lower, US 10Y 2.56% (+0.4bps), off the lows after surprise drop in Dec PPI (-0.1% vs 0.25 exp). Tsys lower o/n on ECB headlines guidance could shift in early 2018, bund yields 2-5 bps higher led by the 5Y sector, large volume going thru in Dec8 euribor contract following the 7:30EST comments. News that Walmart is raising its hourly wage to $11, giving out $1,000 in bonuses due to tax overhaul also pressuring tsys. US auctions $12bln in 30Y bonds at 1:00PM. GOCs lower, 2bps wider vs tsys, with the 10Y 2.19% after reaching 2.23% yest before the NAFTA headlines hit the tape. Odds of rate hike next week scaled back to ~80% from 92% yest morn. Provi spreads ~2bps wider yest on NAFTA concerns, Quebec/ont narrower, -3bps at a new low.
News headlines
Euro Gains on ECB Minutes as Stocks Dip; Oil Rises: Markets Wrap (Bloomberg) The euro jumped after minutes from the European Central Bank’s December meeting, weighing on stocks in the region as investors struggled to put Wednesday’s turbulence behind them. U.S. equity futures rose, Treasuries steadied and oil hit a three-year high.
Canada Raises Alarm on Trump Leaving Nafta (Bloomberg) Canadian government officials said there’s an increasing likelihood U.S. President Donald Trump will give six-months’ notice to withdraw from Nafta, dragging down the loonie, yields on government bonds and Mexico’s peso.
Cryptocurrencies Retreat Amid Concern of South Korean Clampdown (Bloomberg) Bitcoin slumped as South Korea’s justice minister reiterated his proposal to ban local cryptocurrency exchanges, fueling concern that a government crackdown will erode one of the world’s biggest sources of demand for digital currencies.
U.S. import prices barely rise; wholesale inventories rebound (Reuters) U.S. import prices recorded their smallest increase in five months in December and underlying imported price pressures were muted amid declining costs for food and consumer goods.
No Deal Brexit Could Cost 482,000 Jobs as City Recruitment Slows (Bloomberg) Leaving the European Union without a deal in 2019 could cost Britain almost half a million jobs, a report found as London’s key finance industry vacancies also plummeted the most in three years.
IBM to reassign 30 percent of staff in 2018: The Register (Reuters) International Business Machines Corp plans to reassign up to 30 percent of staff in its 103,000 computer service delivery business this year with job losses through attrition of around 10,000, technology website The Register reported on Thursday, citing unnamed company insiders.
Canada building permits fall in Nov on fewer nonresidential plans (Reuters) The value of Canadian building permits tumbled more than expected in November on fewer plans for commercial and industrial buildings, though intentions for single-family homes edged up, data from Statistics Canada showed on Wednesday.
Overnight markets
Overview: US 10yr note futures are down -0.025% at 122-31, S&P 500 futures are up 0.17% at 2755.25, Crude oil futures are up 0.47% at $63.87, Gold futures are up 0.23% at $1322.4, DXY is down -0.25% at 92.101, CAD/USD is down 0% at 0.797.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.779% | 2 Year | 1.968% |
| 5 Year | 1.984% | 5 Year | 2.326% |
| 10 Year | 2.193% | 10 Year | 2.553% |
| 30 Year | 2.414% | 30 Year | 2.898% |
US Economic Data
| 8:30 AM | PPI Final Demand MoM, Dec -0.1% est 0.2% (0.4% prior) |
| PPI Ex Food and Energy MoM, Dec -0.1% est 0.2% (0.3% prior) | |
| PPI Ex Food, Energy, Trade MoM, Dec 0.1% est 0.2% (0.4% prior) | |
| PPI Final Demand YoY, Dec 2.6% est 3.0% (3.1% prior) | |
| PPI Ex Food and Energy YoY, Dec 2.3% est 2.5% (2.4% prior) | |
| PPI Ex Food, Energy, Trade YoY, Dec 2.3% (2.4% prior) | |
| Initial Jobless Claims, Jan 6th 261k est 245k (250k prior) | |
| Continuing Claims, Dec 30th 1867k est 1920k (1914k prior) | |
| 9:45 AM | Bloomberg Consumer Comfort, Jan 7th (51.8 prior) |
| 14:00 PM | Monthly Budget Statement, Dec est -26.0b (-138.5b prior) |
Canadian Economic Data
| 8:30 AM | New Housing Price Index MoM, Nov 0.1% est 0.2% (0.1% prior) |
| New Housing Price Index YoY, Nov 3.4% (3.5% 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
10/01/2018
Market Update
US tsys continuing to selloff this morning, US 10Y 2.582% (+2.9bps), tsy curve another 4bps steeper led by the long end, heavy volume in TY futures (>900k). Tsys dropped sharply in Asia after Bloomberg headline out of China that officials there are wary of treasury buying due to supply, trade tensions.. Block trade steepener in 10Y/ ultras with a DV01 of $565k . US auctions $20bln in reopened 10Y notes at 1:00PM. EGBS lagging the move lower in tsys, ,10Y bund future unch, despite a technically uncovered 10Y benchmark bund auction, results coming out right after the China tsy news however. GOCs lower, spreads 1bp narrower vs tsys. BOC auctions $3.6bln in reopened Feb 2020s at noon.
News headlines
China May Halt Purchases of U.S. Treasuries (Bloomberg) China added to bond investors’ jitters on Wednesday as traders braced for what they feared could be the end of a three-decade bull market. Officials in Beijing reviewing the nation’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, according to people familiar with the matter. Benchmark bonds reversed earlier gains on the news, with the yield on 10-year Treasuries climbing for a fifth day.
Trump’s Willingness to Deal on Immigration Adds Urgency to Talks (Bloomberg) Congressional Republicans got the green light from President Donald Trump to negotiate an immigration deal with Democrats, potentially clearing a stalemate that’s stalled action on multiple issues, including funding to keep the government from shutting down next week.
EU Risks Global Bank Crisis If It Blocks Brexit Deal, U.K. Warns (Bloomberg) The European Union risks opening the door to another global financial crisis if it refuses to give London’s bankers a good trade deal, two senior U.K. ministers said, as the finance industry emerged as a key battleground for Brexit talks.
Stocks Retreat as Dollar Declines With Treasuries: Markets Wrap (Bloomberg) European stocks dropped on Wednesday and U.S. equities were poised to follow suit as investors digested a surge in bond yields, the flip side to synchronous global growth and potentially rising inflation. The dollar retreated against all G-10 peers.
Canada housing starts fall in December as condos decline: CMHC (Reuters) Canadian housing starts fell in December, as expected, as a sharp decline in multiple unit urban starts outweighed a rise in single-detached starts, data from the Canada Mortgage and Housing Corporation showed on Tuesday.
NAFTA breakup poses biggest risk to Canadian railways, experts say (Financial Post) The potential dismantling of the North American Free Trade Agreement poses the biggest risk to Canada’s railways not benefiting this year from healthy economies and higher demand to move crude oil, say industry observers.
Trump policies loom large for Canadian banks (Financial Post) NAFTA renegotiations and recently passed corporate tax cuts were among the policies of U.S. President Donald Trump that loomed large over a get-together of Canada’s top bank CEOs Tuesday.
Overnight markets
Overview: US 10yr note futures are down -0.19% at 122-26, S&P 500 futures are down -0.33% at 2743.25, Crude oil futures are up 0.89% at $63.52, Gold futures are up 0.78% at $1323.9, DXY is down -0.49% at 92.078, CAD/USD is down -0.1% at 0.803.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.783% | 2 Year | 1.964% |
| 5 Year | 2.018% | 5 Year | 2.343% |
| 10 Year | 2.217% | 10 Year | 2.583% |
| 30 Year | 2.438% | 30 Year | 2.934% |
US Economic Data
| 7:00 AM | MBA Mortgage Applications, Jan 5th 8.3% (-1.6% prior) |
| 8:30 AM | Import Price Index MoM, Dec 0.1% est 0.4% (0.7% prior) |
| Import Price Index ex Petroleum MoM, Dec -0.2% est 0.1% (0.1% prior) | |
| Import Price Index YoY, Dec 3.0% est 3.1% (3.1% prior) | |
| Export Price Index MoM, Dec -0.1% est 0.3% (0.5% prior) | |
| Export Price Index YoY, Dec 2.6% (3.1%% prior) | |
| 10:00 AM | Wholesale Inventories MoM, Nov est 0.7% (0.7% prior) |
| Wholesale Trade Sales MoM, Nov est 0.6% (0.7% prior) |
Canadian Economic Data
| 8:30 AM | Building Permits MoM, Nov -7.7% est -1.0% (3.5% 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