Commentaires

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

Market Update

Tsys lower in risk on trade, yields 3bps higher, EGBs lower after polls show Macron beat Le Pen in TV debate last night. Gilt yields sharply higher on firmer Feb inflation figures – UK CPI 2.3% vs 2.1% exp. above BOE’s 2.0% target for the first time since Nov 13.  Bunds weighed by French results, UK data, easing of French election risk has raised rate hike expectations along euribor strip. GOCs lower, spds 1-2bps wider vs tsys on better than exp Jan Retail Sales (2.2% vs 1.5% exp). Jan. GDP likely to be revised higher after better readings on manufacturing and now retail sales in the past week.  CAD sharply higher after the release, buoyed by residual weakness in USD from dovish fed last week. Provis unch, Alberta underperforming post budget. 407 Intl in the mkt with  $250mln June 1 33s (~16yrs)  at ~125.

News headlines 

Euro Climbs as France Concern Eases; Gold Retreats: Markets Wrap (Bloomberg) The euro rose to the strongest in more than a month after a French presidential debate eased concern about a populist win in the election. The dollar extended its decline as Fed officials weighed the pace of borrowing-cost hikes, and emerging-market stocks kept climbing.Europe’s common currency strengthened against most of its major peers after centrist Emmanuel Macron was widely judged to have come out on top in the televised contest. That helped send the greenback lower for a fifth day. Developing-nation equities extended a winning streak, with the MSCI Emerging Market Index advancing an eighth day. Gold fell for the first time in five days. Sterling surged after data showed U.K. inflation rose faster than expected.

U.K. Inflation Gains More Than Forecast, Breaching BOE Goal (Bloomberg) U.K. inflation accelerated more than economists forecast in February, breaking through the Bank of England’s target for the first time in more than three years. The 2.3 percent increase in the consumer prices index was the fastest since September 2013 and above the median prediction for 2.1 percent. The rate is up from just 0.3 percent a year ago, reflecting sterling’s 17 percent drop since the Brexit vote in June, as well as an increase in oil prices.

Oil prices rise on talk of OPEC cut extension, inventories in focus (Reuters) Oil prices rose on Tuesday, helped by expectations that an OPEC-led output cut would be extended beyond June but gains were pegged back by concerns about persistently high crude inventories. The Organization of the Petroleum Exporting Countries and some non-OPEC producers agreed to curb production from Jan. 1 by 1.8 million barrels per day (bpd) for six months to drain crude from record stockpiles. But inventories remain stubbornly large.

EU finance ministers worried about free trade after ‘surreal’ G20 (Reuters) European Union finance ministers expressed concern on Tuesday over the future of free trade after what one of them called a « surreal » meeting of finance chiefs of the world’s 20 biggest economies at the weekend. Breaking a decade-long tradition of endorsing open trade, G20 finance ministers and central bankers made only a token reference to trade in their communique, acquiescing to an increasingly protectionist United States after a two-day meeting in Germany failed to yield a compromise.

Bill Morneau says Ottawa will go light on the red ink in Wednesday’s budget (Financial Post) Canada’s Finance Minister is sticking by his pledge to lower the nation’s debt ratio, signalling the government won’t push much deeper into deficit when it delivers its budget this week. Bill Morneau said he remains committed to the notion a falling level of debt relative to the total size of the economy shows fiscal prudence. The country’s low growth, along with new spending on infrastructure and transfer payments, has forced the government to abandon other fiscal pledges.

TransCanada Corp. seeks natural gas pipeline approval linked to Petronas LNG project (Financial Post) Transcanada Corp has secured shippers’ commitment for a pipeline associated with Malaysian state-owned oil company Petronas’ pending Pacific NorthWest liquefied natural gas terminal in western Canada and will seek early construction, the company said on Monday. Government construction approval will allow the company to start building most of the North Montney Mainline before Petroliam Nasional Bhd, or Petronas, decides whether to commit to the project, TransCanada said in a statement.

Overnight markets 

Overview: US 10yr note futures are down -0.126% at 123-27, S&P 500 futures are up 0.19% at 2374.75, Crude oil futures are up 0.27% at $48.35, Gold futures are down -0.12% at $1232.5, DXY is down -0.55% at 99.859, CAD/USD is down -0.49% at 0.7526.

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