Commentaires

Market Update

Tsys higher, yields 1-2bps lower, curve flatter, 10Y 2.606% (-2bps), S&P futures lower and crude below $48 on news OPEC raised output above 10mln bbls/day in Feb. Bund yields lower after the 10Y briefly went above 0.50% for the first time since January of last yr, now 0.477%. Gilt yields not reacting much to Brexit news or BOE Hogg resignation, thou the pound fell to an eight-week low vs the USD. GOCs higher, with the 10Y back below 1.85% on bid in tsys, lower crude …CMB 5Y pricing this morning – new June 2022 ~45 bps over 5s – the deal is well spoken for.  Provis better bid to start the week on higher GOC yields, 10Y BC still rumoured with the BC/Ont 26 roll unch -8/-8.5.

News headlines 

Stocks Drop Before Fed as Pound Slumps on Brexit: Markets Wrap (Bloomberg) Most European stocks retreated as signs of caution started to show in markets before this week’s packed schedule of events, which includes a U.S. interest rate decision. The pound tumbled as the British Prime Minister won permission to trigger the country’s departure from the EU.

Canada Missed Ultra-Long Opportunity Before Trump Yield Spike (Bloomberg) Officials discouraged Canada’s finance minister from selling further ultra-long maturity debt, and potentially locking in near-record low borrowing costs for a generation, just ahead of a surge in yields spurred by the election of U.S. President Donald Trump.

Oil edges off three-month lows, eyes on U.S. inventory (Reuters) Oil prices recovered modestly from three-month lows on Tuesday, with concerns persisting about rising U.S. inventories and few clear signs that OPEC will extend supply curbs beyond June. The immediate focus for investors is Tuesday’s data from the American Petroleum Institute (API) about U.S. crude and product stockpiles after a bigger-than-expected climb in last week’s report. Analysts see a further, albeit smaller, rise this time.

Ackman’s Pershing Square sells Valeant stake, takes $3 billion loss (Reuters) Billionaire investor William Ackman walked away from Valeant Pharmaceuticals International Inc (VRX.TO) on Monday with a loss of more than $3 billion as he sold his entire stake in the struggling drug company after trying to rescue it for some 18 months.

China’s industrial output picking up in 2017 (Market Watch) Industrial production in China expanded 6.3% in the first two months of 2017 from a year earlier, accelerating from 6.0% growth in December, data from the National Bureau of Statistics showed Tuesday.

UK PM May’s hand moves closer to Brexit trigger (Reuters) British Prime Minister Theresa May cleared the final hurdle standing between her and the start of Brexit negotiations on Monday after parliament passed legislation giving her the power to start the EU exit process. Members of the lower house of parliament voted to throw out changes to the bill made by the upper house earlier this month, after the government argued it needed freedom to operate without restriction to get a good deal.

Overnight markets 

Overview: US 10yr note futures are up 0.025% at 122-27, S&P 500 futures are down -0.34% at 2363.75, Crude oil futures are down -1.51% at $47.67, Gold futures are up 0.1% at $1204.3, DXY is up 0.32% at 101.63, CAD/USD is up 0.26% at 0.7418.

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 trading lower, yields 1-1.5bps higher with the 10Y 2.59%, prices pressured lower in transition to NA trading as S&P futs are now positive thou crude is down for a 5th day 48.30 after falling below 48 earlier. FOMC decision the highlight for the week with rate hike almost a certainty at this point given string of stronger data. GOCs lower underperforming tsys across the curve with the 10Y 1.83% – 2s5s ~1bp steeper as the belly of the curve continues to take brunt of selling pressure. Ontarios better bid on higher GOC yields Friday, 26s lifted at 73.5, unch to start with  BC 10Y rumoured (new 2027) with the BC/Ont 26 roll -8/-8.5.

News headlines 

Global stocks, dollar up slightly as pivotal week for markets gets underway (Reuters) An event-packed week for global markets got underway on Monday with stocks steady and the dollar recovering from a three-day fall as investors braced for a potential interest rate hike in the United States, a Dutch election and the first G20 finance ministers’ meeting of the Trump era.

Oil touches three-month lows, as U.S. supply swells (Reuters) Oil hovered around three-month lows on Monday, as rising U.S. inventories and drilling activity offset optimism over OPEC’s efforts to restrict crude output. Brent crude LCOc1 was up 4 cents on the day, at $51.41 a barrel by 0953 GMT, having hit a session trough of $50.85, its lowest since Nov. 30.

Dollar steadies after three-day fall (Reuters) Buying from the start of European trade on Monday halted three days of losses for the dollar, the impact of higher U.S. market interest rates turning it positive on the day against both the euro and a basket of currencies.

Surprise fall in Japan January machinery orders raises doubts about recovery (Reuters) Japan’s core machinery orders unexpectedly fell in January from the previous month and dipped the most in five months, adding to worries about whether recent signs of economic recovery will be sustainable.

‘Coal is in decline’ and it looks like not even Donald Trump can pull the industry’s long-term future out of the fire (Financial  Post) At their most generous, Las Vegas oddsmakers put the chances of Donald Trump winning the U.S. presidency at 25 to one. In other words, a long shot and one that likely mirrored any potential rebound by the country’s thermal coal miner stocks.

New banks try to carve out a niche the Big Six don’t already dominate in hyper-profitable business (Financial Post) Banking is a fantastic business to be in, if the latest round of earnings by Canada’s Big Six banks is any indication. Each of them beat fiscal first-quarter market expectations, had double-digit profit increases over a year earlier and collectively earned some $10.5 billion in adjusted net income.

Overnight markets 

Overview: US 10yr note futures are down -0.038% at 122-31, S&P 500 futures are up 0.01% at 2368.75, Crude oil futures are down -0.33% at $48.33, Gold futures are up 0.11% at $1202.7, DXY is up 0.04% at 101.29, CAD/USD is down -0.07% at 0.7429.

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 off the lows after payrolls came in above exp 235k vs 200k exp yetaverage hourly earnings weaker 0.2% vs 0.3% and the unem rate unch 4.7% -the 10Y 2.576% vs 2.602% pre payrolls. Tsy prices slightly higher in Europe on weaker IP, Man Prod data out of the UK and France then fading close towards yest aft lows pre payrolls. GOCs lagging the recovery in tsys 2-4bps after blowout Feb Cdn employment – 15.3k vs -5.0k exp with the umeployment rate down to 6.6% from 6.8%, the lwoest since Jan 15. Another busy day for corp issuance yest with over $2bln priced including Central Credit Union $400mln 3y @ 90, Dollarama issued $225mln 3Y FRN @ CDOR+59 which was ~5x oversubscribed. CNQ bonds active with the oil sands acquisition from Shell, bonds initially wider on the news yet snapped back in as the deal looks to be accretive to cash flow/earnings as CNQ is seen to be acquiring oil sands assets on the cheap.

News headlines

Treasuries Slump Worsens Before Jobs as Oil Drops: Markets Wrap (Bloomberg) Oil’s lowest settlement since November added to concern that commodity-fueled inflation will wane. The selloff in Treasuries continued, while U.S. stocks finished little changed as European Central Bank optimism on global growth bolstered the euro.

U.S. job growth seen strong in February; wages to rebound (Reuters) U.S. employers likely maintained a brisk pace of hiring in February and boosted wages for workers, which is expected to give the Federal Reserve the green light to raise interest rates next week despite slowing economic growth. Nonfarm payrolls probably increased by 190,000 jobs last month, according to a Reuters survey of economists, in part as unseasonably mild weather buoyed employment in the construction sector. The economy created 227,000 jobs in January.

Japan bats away U.S. complaint on autos (Reuters) Japan rejected U.S. demands for more access to Japan’s car market on Friday, casting doubt over whether it can avoid friction over autos and agriculture imports at high level bilateral talks on economic relations next month.

Canada to make skilled-worker permits easier to get in wake of U.S. delays (TheGlobeAndMail) As the U.S. border tightens for both political and bureaucratic reasons, the federal government is launching a new stream of its temporary foreign worker program to entice highly skilled workers to come to Canada.

Canada Oil Dependence on U.S. Loosens in Age of Donald Trump (Bloomberg) The Canadian oil patch’s half-century bond to the U.S. market is loosening one tanker load at a time in Donald Trump’s “America First” era. Last month, a ship loaded oil off Newfoundland and set sail on a 10,000-plus nautical mile journey to China, following on the heels of an oil sands cargo shipped from the U.S. Gulf Coast. India-based Reliance Industries Ltd is set to receive the first shipment of heavy Canadian crude in April, a person familiar said last month.

Trump’s disputes with local governments could create fresh conflicts of interest (Reuters) The Trump National Golf Club in Westchester County, New York, has a magnificent course. Just ask its namesake, U.S. President Donald Trump, who until recently was quoted on its website saying the club « provides more than a membership – it’s a true luxury lifestyle. »

Overnight markets 

Overview: US 10yr note futures are up 0.038% at 122-28, S&P 500 futures are up 0.48% at 2374.5, Crude oil futures are up 0.59% at $49.57, Gold futures are down -0.42% at $1198.2, DXY is up 0.07% at 101.92, CAD/USD is down -0.51% at 0.7439.

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