Commentaires
15/01/2018
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.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.758% | 2 Year | 1.998% |
| 5 Year | 1.971% | 5 Year | 2.347% |
| 10 Year | 2.172% | 10 Year | 2.546% |
| 30 Year | 2.367% | 30 Year | 2.849% |
US Economic Data
There is no US Economic Data for today.
Canadian Economic Data
| 9:00 AM | Existing Home Sales MoM, Dec (3.9% prior) |
| 10:00 AM | Bloomberg Nanos Confidence, Jan 12th est 19.0 (18.0 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
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