Commentaires

Market Update

US tsys higher, yields another 1-2bps lower, with the US 10Y 2.358% (-1.8bps) in follow thru to yesterday’s ‘risk off’ rally.  European stocks are off 1.4% , the USD index is lower for a third day, while crude is trading below $54, down 0.86%. Tsys were flat in Asia but rallied in Europe amid weaker stocks, weaker USD/JPY. GOCs  higher , spds 1-2 bps wider vs tsys after Jan CPI more than doubled forecasts 0.9% vs 0.4% on a 21% rise in gas prices, curve still retaining its flatter bias led by 5s. Provis ended tighter again yest ~1bp despite a so-so  NB 10Y.Alberta Q3 update – deficit for FY17 unch from Q2 forecast at $10.8bln with direct borrowing increasing by $1.1bln compared to budget. No impact on spds.

News headlines 

Futures drop along with oil prices (Reuters) U.S. stock index futures were lower on Friday as a drop in oil prices weighed on the « Trump rally », with investors also seeking details regarding President Donald Trump’s plans to boost the economy. Oil prices fell after U.S. crude inventories rose for a seventh week, showing the market is still struggling to ease oversupply.

Oil futures suggest bullish funds’ big bet on price may pay off (Reuters) Oil investors have placed the biggest bet in history that prices will rise, as the world’s largest exporters cut output to reduce a glut in supply, and the futures market is suggesting for the first time in a year that they could be onto a winner.

China says no intention of using currency devaluation to its advantage (Reuters) China said on Friday it had no intention of using currency devaluation to its advantage in trade, responding to U.S. President Donald Trump’s description of the Asian giant as the « grand champions » of currency manipulation.

Magna warns of Trump, Brexit impact; raises dividend (GlobeAndMail) Magna International Inc. will raise its dividend 10 per cent, but warned Friday that Brexit and the election of Donald Trump could harm its business and the auto sector generally.

RBC boosts dividend after profit surges 24% to $3 billion, beating expectations (Financial Post) Royal Bank of Canada boosted its first-quarter net income by 24 per cent to $3.03 billion. That’s compared to the $2.45 billion of net income that RBC had during the first quarter of last year.

How Costco Canada breaks retail rules to win (Financial Post) Not far from a table stacked high with men’s blue jeans at one of Canada’s busiest Costco Wholesale Corp. stores is a standalone display for the InstaShiatsu, a cordless neck and back massager that bears all the hallmarks of a juicy impulse buy.

Overnight markets 

Overview: US 10yr note futures are up 0.325% at 125-15, S&P 500 futures are down -0.52% at 2350.5, Crude oil futures are down -0.94% at $53.94, Gold futures are up 0.74% at $1260.7, DXY is down -0.33% at 100.72, CAD/USD is down -0.2% at 0.7646.

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

US tsys firmer, yields 1-2 bps lower led by the 7Y , longs lagging. Tsy sec Mnuchin interviewd on CNBC said tax reform is a priority, yet wont impact economy until next yr. Mnuchin also daid it ‘makes sense’ to look at issuing a 50 year tsy bond. US tsy auctions @ $28bln 7Y bonds with the WI ~2.22%, 6bps richer than the prior auction. French bonds are outperforming, yields 4-6bps lower related to yest news of coalition between centrist politician Bayrou and Macron. Atlanta Fed Lockhar saying 2-3 rate hikes is appropriate for this yr.  Fed funf futures mkts are pricing in 36% odds of a rate hike in March vs 32% at the start fo the month. The odds of two hikes before y/e has barely risen despite the hawkish fed rhetoric of late, currently standing at ~25%. GOCs higher, curve 2bps flatter led by 10s, the 10Y ~4bps lower @ 1.68% . Provi spds well bid this morning, Ontarios trading up in 10s & longs , Ont 26s @ 75 – 3bps tighter on the week after Q3 update expecting a $1.9bln deficit for theis FY vs over $4.0bln initially projected, the lowest since the 2008 econ crisis.

News headlines 

Investors Weighing Earnings, Fed Hit Pause Button: Markets Wrap (Bloomberg) Markets largely entered a holding pattern Thursday, with global equities mixed and the dollar edging higher as investors digested a fresh batch of European corporate earnings, the latest twists in the French election and minutes from the Federal Reserve. Oil climbed.

French Bonds Rally After Macron Boosts Presidential Campaign (Bloomberg) French government bonds led gains in Europe after independent candidate Emmanuel Macron agreed to an alliance with his centrist rival Francois Bayrou, boosting his bid to become president.

UK economy picks up in late 2016 but signs of Brexit hit appear (Reuters) Britain’s economy sped up at the end of 2016, data showed, but over the whole year it was weaker than previously thought and there were signs that the Brexit vote will increasingly act as a brake on growth in 2017.

Tax, Borrow or Wait? Something’s Got to Give in Trudeau’s Budget (Bloomberg) Justin Trudeau’s embrace of deficits won him accolades from global investors and policy makers, but not a full year into his first budget and Canada has run out of fiscal runway.

Exxon revises down oil and gas reserves by 3.3 billion barrels (Reuters) U.S. oil major Exxon Mobil Corp has revised down its proved crude reserves by 3.3 billion barrels of oil equivalent as a result of low oil prices throughout 2016, a company filing showed on Wednesday.

CIBC kicks off big bank results with profit boost, dividend hike (TheGlobeAndMail) Canadian Imperial Bank of Commerce reported higher profit of $1.4-billion for its fiscal first quarter, boosted in part by the sale of real estate properties. Adjusted to exclude certain items, CIBC’s profit was up 13 per cent to nearly $1.2-billion, or $2.89 per share, ahead of analysts’ expectations of $2.57 a share.

Overnight markets 

Overview: US 10yr note futures are up 0.2% at 125-01, S&P 500 futures are up 0.17% at 2365, Crude oil futures are up 2.05% at $54.69, Gold futures are up 1.26% at $1248.8, DXY is down -0.17% at 101.05, CAD/USD is down -0.55% at 0.7638.

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 firmer, curve flatter with the long end outperforming, yields 1-2bps lower, with the 10Y 2.411 (-1.8bps).  Heavy volume in TY futures (508K) with a slight fade in Asia and rally in Europe  on safe haven buying related to French election and weaker Q4 UK GDP (2..0% y/y vs 2.2% exp). French risk sent 2Y German yields to new record lows at -0.915%,  the France 5Y hit 0.20% before reversing 7bps to 0.13% on new poll which showed Le Pen losing ground. The US auctions $34bln in 5Y notes at 1:00Pm with the 2Y FRN sale at 11:30. GOCs gaining ground after very disappointing retail sales for Dec -0.5% vs 0.0% exp with ex-autos weaker as well -0.3% vs 0.5% exp. Provis well bid after better Ontario deficit numbers released yest, Ontarios trading up late yest afternoon.

News headlines 

Euro Slips, Bonds Gain as Investors Turn Cautious: Markets Wrap (Bloomberg) The euro extended declines and bonds rose as European political risk ensured an ongoing demand for havens. The dollar edged higher before the release of Fed minutes.

Oil Slips From One-Week High as Focus Returns to OPEC Cuts (Bloomberg) Oil fell from the highest price in more than a week amid speculation about the effectiveness of OPEC’s supply curbs and forecasts for another expansion in U.S. crude stockpiles. Futures dropped 0.6 percent in London, ending three days of gains.

China home price growth cools for 4th straight month as government curbs bite (Reuters) China’s home price growth slowed for the fourth straight month as demand cooled further in its biggest cities, a welcome sign for policymakers as they seek to defuse bubbles in the world’s second-largest economy amid an explosive growth in debt.

Eurozone finally escapes deflation in January (Market Watch) For the first time in almost four years, none of the eurozone’s 19 members was in deflation during January, an encouragement to the European Central Bank in its long struggle to lift inflation to its target and keep it there.

German Ifo Sentiment Rises as Bundesbank Sees Growth Pickup (Bloomberg) German business confidence unexpectedly improved, underpinning the Bundesbank’s prediction that economic growth strengthened at the start of the year. The Munich-based Ifo institute’s business climate index rose to 111 in February from a revised 109.9 in January. That compares with a median estimate of 109.6 in a Bloomberg survey of economists.

Sterling hits two-month high versus euro ahead of GDP breakdown (Reuters) Sterling gained another 0.4 percent against the euro in early trade in London on Wednesday, extending a run to two-month highs in the previous session driven by French political nerves.

Bell-MTS approval could influence potential Quebecor-Shaw spectrum deal, analysts say (Financial Post) An apparent easing in the federal government’s policy aimed at encouraging four national wireless careers raises the question of whether Quebecor Inc. will sell its non-core spectrum to Shaw Communications or wait for a better offer from the Big Three.

Overnight markets 

Overview: US 10yr note futures are up 0.1879% at 124-30, S&P 500 futures are down -0.11% at 2357.5, Crude oil futures are down -0.64% at $53.98, Gold futures are up 0.1% at $1240.1, DXY is up 0.21% at 101.58, CAD/USD is up 0.42% at 0.7577.

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