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Market Update

Tsys moving higher after Feb  Durable Goods ex transport came in below exp 0.4% vs 0.6%,  recouping overnight  losses in low volume session as mkts continue to await vote on health care bill in Us house. Equity futures up slightly, crude up 0.50%.  Core Euro bonds higher, 10Y tsy/bund continues to retreat from Tuesday’s 195bp low, now above 200. The Dutch State Treasury released their updated 2017 borrowing pgm, sees issuance requirement continuing to decline, revises budget surplus to 0.5% from balanced in Dec, and inflation rising to 1.6% this yr from 0.9% forecast in Dec. US tsy secretary Mnuchin on the tape saying he expects Obamacare repeal/replace to pass the House. GOCs higher, curve flatter after Feb Cdn CPI came in as exp  0.2% m/m, thou CPI y/y slowed to 2.0% from 2.1% in Jan.  Provincials opening unch after closing 1bp toghter after well received Ontario 27 issue @ 75.5, now 75/74 with no supply expected today. BCIMCR in the mkt yeserday with $250mm long 5Y (August 2022) @ 93.1 & $500mm  10Y @ 120.2.  The 10Y tranche appeared more interesting given the ~4bp concession.

News headlines 

Stocks Slide as Vote Sidelines Traders; Oil Rises: Markets Wrap (Bloomberg) European stocks gave up some of Thursday’s gains while bonds advanced before a U.S. health-care vote that has dominated market sentiment this week. The STOXX Europe 600 Index extended its weekly decline, with insurers and energy companies the biggest losers, as trading volumes dropped by almost a third from the previous week. The yen halted its longest rally since 2011 as U.S.

Euro-Area Economic Momentum Bodes Well for Prices and Jobs (Bloomberg) The euro area’s accelerating economy is translating into faster job creation and stronger inflation pressures. A key gauge of activity rose to a near six-year high in March, and employment increased the most since July 2007, with hiring picking up both in services and manufacturing. The jump in the headline IHS Markit Purchasing Managers Index compared with economists’ expectation for a decline and the latest reading is in line with a quarterly economic expansion of 0.6 percent. That’s faster than the 0.4 percent pace in the last three months of 2016.

Oil edges up as Saudis cut supplies to U.S., but global glut remains (Reuters) Oil edged higher on Friday, boosted by hopes that an OPEC output cut was beginning to balance a long-oversupplied market, but benchmark prices were on track for weekly losses as concerns persisted over an excess of crude. Benchmark Brent crude futures LCOc1 were at $50.86 per barrel at 1040 GMT (6:40 a.m. ET), up 30 cents from their last close.

Trump Dares GOP in High-Stakes Vote on Troubled Health Bill (Bloomberg) House GOP leaders are hurtling toward a vote Friday on their embattled health-care bill without knowing for sure whether they have enough support to pass the measure, after yielding to Trump administration demands to act now. If the high-stakes gamble works and the House manages to pass the Obamacare replacement bill, it will be an important win for President Donald Trump and House Speaker Paul Ryan who have formed an uneasy alliance to repeal the health care law.

TransCanada gets presidential permit for Keystone XL (Reuters) TransCanada Corp (TRP.TO) said on Friday the U.S. Department of State issued a presidential permit for the construction of the Keystone XL pipeline linking Canadian oil sands to U.S. refiners, a project blocked by former President Barack Obama. President Donald Trump signed an executive order to advance the project soon after taking office in January, saying it would create thousands of jobs.

Deutsche Bank picks new London office in show of faith in Britain (TheGlobeAndMail) Deutsche Bank has chosen a new office for its London headquarters, signaling a vote of confidence in Britain’s capital despite the country’s decision to leave the European Union. The German lender has entered into exclusive negotiations with developer Land Securities over a 25-year lease on a new building to be constructed at 21 Moorfields in the City of London, according to a memo sent to staff on Thursday and seen by Reuters.

Overnight markets 

Overview: US 10yr note futures are down 0% at 124-13, S&P 500 futures are up 0.21% at 2345, Crude oil futures are up 0.8% at $48.08, Gold futures are down -0.13% at $1248.5, DXY is down -0.09% at 99.675, CAD/USD is up 0.23% at 0.7473.

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

Tsys slightly higher, yields 1bp lower , recovering overnite losses on uncertainty over ACA vote, low volume in TY1 futures, US 10Y 2.40%. Various Fed speakers this morning including Fed Yellen who did not comment on monetary policy – key health care vote later tonight. The USD traded in the narrowest range so far this yr, should the health care repeal fail the USD could fully erase gains made since the election. Core Euro govt bonds lower, 10Y gilt 1bp higher @ 1.185% on strong Feb retail sales. GOCs higher, in line with tsys as prices bounce off the lows.  Budget was basically a non event: deficit expected to rise to $28.5bln for 17/18 from est $23bln and the timeline for eliminating deficits pushed beyond 2021-22. Sask budget also released last nite – no impact on Sask/Ont rolls so far.

News headlines 

Global Stock Selloff Eases as Yen Extends Rally: Markets Wrap (Bloomberg) A global equities selloff that spurred the biggest drop in shares since Donald Trump’s election eased as investors stepped back before a key U.S. vote on health care. The yen gained for an eighth day, the longest winning streak in six years.

Oil up from four-month lows, inventories curb recovery (Reuters) Oil prices rallied from four-month lows on Thursday but the recovery was cautious with investors concerned that OPEC-led supply cuts were not yet reducing record U.S. crude inventories. Brent crude, the international benchmark for oil, was trading at $51.02 a barrel by 1112 GMT (7:12 a.m. ET), up 38 cents on the day and rebounding from Wednesday’s slide to $49.71, it lowest level since Nov. 30 when OPEC announced plans to cut output.

Banks Take $252 Billion in ECB Free Loans With QE Exit in Mind (Bloomberg) The European Central Bank gave euro-area banks 233.5 billion euros ($252 billion) in its last offer of free long-term cash, the largest net amount since the program was launched. Banks’ interest in Targeted Longer-Term Refinancing Operations — four-year loans at a rate that starts at zero and could go lower — has increased as the economic recovery spurs calls for an exit strategy from ECB stimulus.

Swiss central bank bought another 67.1 billion Sfr in FX in 2016 (Reuters) Switzerland’s central bank bought another 67.1 billion Swiss francs (54.17 billion pounds) worth of foreign currencies in 2016, almost a quarter less than the previous year, in its effort to fight the appreciation of the safe-haven franc.

Canada’s `Lightweight’ Budget Is Mostly Wait and See on Trump (Bloomberg) He wasn’t mentioned once, but U.S. President Donald Trump was all over Canada’s minimalist budget. Prime Minister Justin Trudeau hit the brakes on new spending and major tax changes in a wait-and-see budget that marked a major shift for his activist administration, which last year unveiled an ambitious deficit-spending plan to stoke growth.

Canada joins China-backed Asian Infrastructure Bank (TheGlobeAndMail) The Asian Infrastructure Investment Bank has made Canada a prospective member, welcoming Ottawa into an institution that marks one of China’s leading efforts to take a place of global leadership. Joining the bank will give Canada a voice at the table of a major new multi-national organization, although with less voting clout than it might have wielded had it moved earlier, alongside 57 founding members.

Overnight markets 

Overview: US 10yr note futures are up 0.013% at 124-18, S&P 500 futures are up 0.07% at 2344.25, Crude oil futures are down -0.23% at $47.93, Gold futures are up 0.14% at $1254.5, DXY is up 0.07% at 99.743, CAD/USD is up 0.07% at 0.7498.

US Economic Data

Canadian Economic Data

There is no major economic news release 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

Tsys higher, yields 1bp lower with the 10Y 2.41 after dipping below 2.40 on heavy volume in TY futures (430k), Carry over from risk off  yest with S&P futures lower after Tuesday’s big declines. Uncertainty over Thursday’s health care vote , French election and N. Korea al factors supporting bid in tsys. EGBs higher, bund/gilt yields 2-5bps lower -yesterday’s tsy rally brought the 10Y tsy/bund spd to four month lows 195bps. GOCs higher in line with tsys after giving up ~3bps in 5s yest, thou 10s & longs have barely cheapened on x-mkt basis despite strong eco no.s. Provis 0.5bps wider yest on no issuance, Alta/Ont46 roll ~5bps wider since budget last week. 407 priced 250MM 16 yr bonds yest which broke 2-3bps tighter.

News headlines 

U.S. stock futures slip as concerns mount over delays to Trump tax cuts (Reuters) U.S. stock index futures were lower on Wednesday as investors sought safe haven assets, a day after Wall Street posted its biggest one-day fall since the November election. Investors are becoming increasingly worried about the ability of President Donald Trump to deliver on his campaign promises of cutting taxes.

Canada’s New Infrastructure Bank Seeks to Clear Billions in Backlogs (Bloomberg) Infrastructure is Canadian Prime Minister Justin Trudeau’s biggest spending commitment. But he needs help. Canada is preparing to launch a government infrastructure bank to spur development of projects across the country, from roads to subways, by drawing in private capital from pension funds and other institutional investors. To do it, Trudeau will directly subsidize some projects, and agree to take a back-seat stake in others.

Oil prices hit three-month low on expanding U.S. inventories (Reuters) Oil prices slipped to three-month lows on Wednesday after data showed U.S. crude inventories rising faster than expected, piling pressure on OPEC to extend output cuts beyond June. A deal between the Organization of the Petroleum Exporting Countries and some non-OPEC producers to reduce output by 1.8 million barrels per day (bpd) in the first half of 2017 has had little impact on bulging global stockpiles of oil.

Trudeau to Make Case That Growth and Redistribution Can Coexist (Bloomberg) Prime Minister Justin Trudeau will try to convince Canadians he’s just as good at generating growth as he is at handing out checks. Bill Morneau, his finance minister, releases a budget at 4 p.m. Ottawa time that will address the country’s lackluster economic performance, and will lay out how the Liberals, who came to power in late 2015, intend to accelerate infrastructure spending and drive innovation.

Surging sales of $1-million-plus Toronto homes fuel calls for new measures (TheGlobeAndMail) Sales of single-family detached houses commanding prices of at least $1-million have almost doubled this year in the Greater Toronto Area, as economists raise the spectre of a real estate bubble. The GTA saw 2,876 sales of detached properties of $1-million or more in January and February, compared with 1,548 in the first two months of 2016, a new study by Sotheby’s International Realty Canada shows.

Amaya’s profit beats on lower costs (TheGlobeAndMail) Canada’s Amaya Inc , owner of online gambling sites PokerStars and Full Tilt, reported fourth-quarter profit ahead of estimates as it added more customers and cut costs. Amaya said it expects adjusted profit of $1.94-$2.13 per share in 2017, higher than the $1.88 per share it earned last year.

Overnight markets 

Overview: US 10yr note futures are up 0.138% at 124-15, S&P 500 futures are down -0.09% at 2340.25, Crude oil futures are down -1.45% at $47.54, Gold futures are up 0.06% at $1247.2, DXY is up 0.04% at 99.849, CAD/USD is up 0.24% at 0.7472.

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230