Commentaires

Market Update

Tsys trading weaker, close to overnight lows , with the 10Y above 2.60% since March, now 2.61 (+2bps), heavy volume in TY futures (580k), stops triggered in futures, convexity holding on break above 2.60% (MNI). Core Euro bonds also lower , thou 10Y bund has rebounded from o/n losses on comments from Bundesbank Pres Weidmann that Germany should not expand fiscal policy, the 10Y tsy/bund spd widening from 10bps over the week to 204. GOCs weaker in line with tsys, curve steeper.  GOC made round trip yesterday, yields essentially unch in wake of ‘dovish hike’  – with the curve ~1bp steeper. 10Y GOC abpve 2.20% resistance , highest since Sep 2014. 

News headlines

House Heads for Vote on Stopgap Funding Plan: Shutdown Update (Bloomberg) Temporary government funding runs out Jan. 19 and the House and Senate will have to pass a temporary extension to avoid a partial shutdown of the federal government. Democrats are demanding that spending legislation include a provision permanently shielding about 690,000 undocumented immigrants brought to the U.S. as children from deportation.

China’s economy grew 6.9% in 2017, topping both the official target and 2016’s growth (NBC) China’s economy grew 6.9 percent in 2017, ending the year on a positive note as official figures topped the government target of around 6.5 percent, the country’s statistics bureau said on Thursday.

OPEC-Russia Oil Deal Faces a New Danger: Too Much Winning (Bloomberg) When OPEC and Russia meet this weekend to review their strategy for clearing a global oil glut, they’ll face an unusual problem: it could be working just a bit too well.

Goldman Is Worth Less Than Morgan Stanley for the First Time in a Decade (Bloomberg) For the first time in over a decade, Goldman Sachs Group Inc. is worth less than its longtime rival, Morgan Stanley, at least in the eyes of equity investors. After reporting a plunge in bond trading, Goldman’s market capitalization fell to $99.4 billion at the close on Wednesday, a fraction less than Morgan Stanley. That snapped a 4,105-day streak, which started on Oct. 23, 2006.

U.S. Treasury Yield Hits 2.6%; Europe Stocks Mixed: Markets Wrap (Bloomberg) U.S. bonds extended a drop to send the 10-year Treasury yield above 2.6 percent for the first time since March, though it did little to help the dollar hold on to Wednesday’s gain. The euro strengthened while European stocks were mixed.

Bank of Canada hikes rates, takes dovish tone amid NAFTA clouds (Reuters) The Bank of Canada raised interest rates on Wednesday, as expected, as job growth and firmer inflation outweighed the cloud of NAFTA uncertainty, but the head of the central bank admitted the decision was not a no-brainer.

Trump says terminating NAFTA would yield the ‘best deal’ in renegotiations (Reuters) U.S. President Donald Trump on Wednesday said that terminating the North American Free Trade Agreement would result in the “best deal” to revamp the 24-year-old trade pact with Canada and Mexico in favor of U.S. interests.

Overnight markets

Overview: US 10yr note futures are down -0.178% at 122-14, S&P 500 futures are down -0.1% at 2801, Crude oil futures are up 0.14% at $64.06, Gold futures are down -0.77% at $1328.9, DXY is up 0.05% at 90.585, CAD/USD is up 0.14% at 0.8032.

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, 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