Commentaires

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

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