Commentaires

Market Update

US Tsys prices open NY mixed after overnight range then creep higher in price since about six am ET, then recent profit-taking; cash 10Y note is at 2.530%, vs. recent low yield notched at 2.517%. More Tsys pressure rate-hike rhetoric from ECB’s Nowotny. Mix of supply-tied hedging and position squaring ahead into wknd saw rates inch slowly off lows. US swaps now steady to marginally mixed; after overnight light 2Y, 5Y paying, likely supply tied; also fast money 5/5Y receiving and deal-tied long end receiving. Asian equity markets saw little in the way of firm direction as markets took a breather after recent key risk events. OPEC may extend oil-supply cuts if stockpiles stay above the five-year average, Saudi Energy Minister Khalid Al-Falih told Bloomberg TV this morning. U.S. Treasury Secretary Steven Mnuchin and his German counterpart Wolfgang Schaeuble, Mnuchin heads to the Black Forest town of Baden-Baden for the G-20 finance ministers’ meeting. President Donald Trump also meets with Chancellor Angela Merkel in Washington today.

News headlines

Emerging Stocks Shine Even as Global Rally Eases: Markets Wrap (Bloomberg) Emerging markets headed toward the best week in eight months even as the global equities rally spurred by the Federal Reserve’s outlook lost momentum. The dollar was poised for its biggest weekly loss since February.

Oil Set for Weekly Gain as Saudis Say Willing to Extend Curbs (Bloomberg) Oil headed for a weekly increase as U.S. stockpiles retreated from record levels while Saudi Arabia said it’s prepared to continue production curbs in the second half of the year. Futures were little changed in New York, up 0.9 percent for the week. U.S. inventories last week fell for the first time this year, according to Energy Information Administration data on Wednesday.

G20 finance heads to repeat FX assurances, no deal yet on rejecting protectionism (Reuters) The world’s financial leaders will renounce competitive devaluations and warn against exchange rate volatility, but they have not yet found a common stance on trade and protectionism, a draft statement of their meeting in Germany showed on Friday.

Carney Warns of Balkanization Risk in Global Financial Markets (Bloomberg) Mark Carney, head of the Financial Stability Board, warned against giving in to “reform fatigue” a decade after the financial crisis, and called on the Group of 20 nations to strengthen regulatory cooperation.

Germany, U.S. risk worsening trade ties: business chamber (Reuters) Germany and the United States must work hard to prevent a deterioration of trade relations between the two countries, the head of the American Chamber of Commerce in Germany said on Friday.

Alberta digs deeper into deficit with budget that bets on oil rebound, pipelines (TheGlobeAndMail) The Alberta government expects to more than double its debt over the next three years and run deficits for six years, all while counting on rising oil prices and unbuilt pipelines to rescue the province’s finances.

Overnight markets

Overview: US 10yr note futures are down 0% at 123-19, S&P 500 futures are up 0.08% at 2381, Crude oil futures are up 0.45% at $48.97, Gold futures are up 0.2% at $1229.5, DXY is down -0.02% at 100.34, CAD/USD is up 0.03% at 0.7506.

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 open NY weaker after Wed post-FOMC rally. FOMC lifted rates by 25bps. However, the Fed dot plot projections showed forecasts for 2017 and 2018 were unchanged from December. Tsys near low end of range, cued by lower Bunds and Gilts. Overnight rates move lower, partly due to hedge unwinds vs. Dutch election concerns; French and Spanish debt issuance also weighed. US swaps, running mildly wider; mild rate and spd paying from specs and fast$ in 2s and 5s, some deal-tied hedging in intermediates. Eurodollar futures mostly lower; LIBOR sets higher. US corporate bond issuance could see Scentre Grp 10Y, APA Grp long 10Y. Following yesterday’s Fed rate hike, the overnight hold from the Bank of Japan and rate increase from the People’s Bank of China, it is the turn of European central banks to announce their decisions today.

News headlines 

Dovish Fed, Dutch Vote Spur Stocks as Oil Advances: Markets Wrap (Bloomberg) Stocks advanced with commodities as the U.S. Federal Reserve’s dovish message continued to feed into markets, and as pro-Europe parties claimed victory in the Netherlands election. The euro and Treasuries gave up some of Wednesday’s advance.

Europe Gets Reprieve in Dutch Election, But the Center Fragments (Bloomberg) When Donald Trump was elected U.S. president in November his Dutch equivalent, Geert Wilders celebrated the arrival of a “Patriotic Spring” that would lift anti-immigrant nationalists to power across Europe. That uprising failed to materialize in the Netherlands.

BOJ sets high hurdles for tapering, rate hike in wake of Fed move (TheGlobeAndMail) Bank of Japan Governor Haruhiko Kuroda said an uptick in inflation towards 1 per cent won’t immediately trigger an interest rate hike, signalling that Japan will stick to its ultra-easy policy even as other major economies eye withdrawing stimulus.

Oil extends gains as dollar and U.S. inventories fall (Reuters) Oil prices rose for a second day on Thursday, supported by U.S. data showing crude inventories had dipped after rising for nine weeks and a weaker dollar after the U.S. Federal Reserve signaled it would not hike rates faster than expected. Brent crude oil was up 38 cents at $52.19 a barrel by 1050 GMT, recovering from Tuesday’s slide to $50.25, its lowest level since Nov. 30 when the Organization of the Petroleum Exporting Countries announced plans to cut supplies.

Yellen Calms Fears Fed’s Policy Trigger Finger Is Getting Itchy (Bloomberg) Federal Reserve Chair Janet Yellen sought to reassure investors that the central bank’s latest interest-rate increase wasn’t a paradigm shift to a trigger-happy policy driven by fears of faster inflation. Speaking to reporters after the Fed’s quarter percentage-point move on Wednesday, Yellen said the central bank was willing to tolerate inflation temporarily overshooting its 2 percent goal and that it intended to keep its policy accommodative for “some time.”

Household debt hits fresh record, with Canadians owing $2 trillion by the end of 2016 (Financial Post) Canadian household debt as a share of income rose to a fresh record in the fourth quarter, data from Statistics Canada showed on Wednesday in a report likely to underscore concerns consumers are becoming overly indebted. The ratio of debt to disposable income rose to 167.3 per cent from an adjusted 166.8 per cent in the third quarter. That meant Canadians owed $1.67 for every dollar of disposable income.

Overnight markets 

Overview: US 10yr note futures are down -0.152% at 123-18, S&P 500 futures are up 0.13% at 2383.5, Crude oil futures are up 0.55% at $49.13, Gold futures are up 2.57% at $1231.6, DXY is down -0.24% at 100.5, CAD/USD is down -0.03% at 0.7518.

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 drifting lower after firmer 8:30 US data , 10Y 2.584(-1.6bps) – Feb retail sales came in as exp but large upward revision to Jan, CPI 0.1% vs 0.0% exp., stronger Empire Man. Modest volume in TY futures overnite as mkt awaits FOMC decision this aft. Core European bonds higher, bund curve continues to flatten , gilts higher as UK avg weekly earnings came in much weaker than expected. GOCs higher, off the highs as tsys pullback post data, curve unch, 10Y 1.83%.  Of note, longs have performed well on the curve in the selloff, 10s30s flatter for a seventh day yest, opening at 64.5. The belly of the curve looks relatively cheap, 2s5s bearing the brunt of the selloff.

News headlines 

Europe Stocks, Oil Rise as Bonds Steady Before Fed: Markets Wrap (Bloomberg) Crude prices were once again a dominant story in markets, with oil’s rebound helping underpin European stocks as investors wait for Wednesday’s expected U.S. interest rate increase. The British pound pared a rebound and metals climbed.

U.S. Retail Sales in February Post Smallest Gain in Six Months (Bloomberg) U.S. retail sales in February posted the smallest gain in six months, indicating a tempering of the consumer spending that’s been carrying the economy. Purchases rose 0.1 percent, matching the Bloomberg survey median estimate, after a 0.6 percent increase in the prior month that was stronger than previously reported, Commerce Department figures showed Wednesday. Just four of the 13 major retail categories saw gains in February sales.

Oil jumps off lows, IEA sees H1 deficit after OPEC cuts (Reuters) Oil prices climbed more than $1 on Wednesday, lifted by a surprise drawdown in U.S. inventories and data from the International Energy Agency (IEA) suggesting OPEC cuts should create a crude deficit in the first half of 2017.

Fed expected to raise rates as U.S. economy flexes muscle (Reuters) The Federal Reserve is expected to raise interest rates for the second time in three months on Wednesday, encouraged by strong monthly job gains and confidence that inflation is finally rising to its target.

UK wage growth weakens but jobless rate lowest since 2005 (Reuters) Inflation gnawed away at British pay growth in the three months to January, an unpromising sign for the economy ahead of its divorce from the European Union even as the unemployment rate fell to its lowest level since 2005.

Quebecor swings to $123.3-million profit in fourth quarter (TheGlobeAndMail) Quebecor Inc. is reporting a profitable fourth quarter, erasing a loss that the media and telecommunications company experienced in the final quarter of 2015. The Montreal-based company had $123.3-million of net income for shareholders in the three months ended Dec. 31.

Overnight markets 

Overview: US 10yr note futures are up 0.102% at 123-00, S&P 500 futures are up 0.22% at 2368.25, Crude oil futures are up 1.89% at $48.62, Gold futures are down -0.3% at $1199, DXY is down -0.11% at 101.59, CAD/USD is down -0.12% at 0.7428.

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