Commentaires

Market Update

US tsys lower, prices at overnite lows on heavy volume in TY futures(488k), Us 10Y 2.456(+4.,1bps). Fed Harker saying would not rule out March rate hike if PCE warranted it in interview with MNI. Core Euro bonds sharply lower, yields 2-3bps higher after strong EU PMI . French yields another 3-7bps higher led by the 5-8 yr sector as Len Pen continues to gain in the polls. GOCs lower , curve 2bps steeper as 10s underperform,  GOC 10Y 1.75 (+4.4bps). Provis unch from Friday when spreads closed ~1bp wider, 10Y Ont @78 bps. Corps well bid, new issues from last week (BIP, Ford, Enercare) all significantly tighter. We continue to see good demand for ‘high beta’ product  – reits, BBB energy (CNQ, Veresen).

News headlines

Stock futures hit record highs amid retail earnings (Reuters) U.S. stock index futures rose to record intraday highs on Tuesday as oil prices surged and investors assessed earnings from top U.S. retailers.

OPEC aims for higher compliance, sees 2017 stock fall (Reuters) OPEC countries are aiming to boost compliance with agreed oil output curbs further from January’s high levels in a bid to clear a supply glut that has weighed on prices, the group’s secretary general said on Tuesday.

Euro-Area Economic Recovery Broadens as France Outpaces Germany (Bloomberg) The euro area’s unexpectedly upbeat economic data on Tuesday might have come with more than one positive message. A gauge for economic activity rose to the highest level in almost six years in February, following previous signals that the region’s frail recovery is finally taking shape. National gauges showed France outpacing Germany for the first time since 2012 — a development that could signal growth in the 19-nation region is becoming more broad-based.

Sterling subdued ahead of Bank of England team’s testimony (Reuters) Sterling fell against the dollar but made ground versus the euro on Tuesday, before Bank of England Governor Mark Carney and a number of his chief lieutenants testify in Britain’s parliament.

Japan February flash manufacturing PMI shows expansion at three-year high (Reuters) Japanese manufacturing activity expanded in February at the fastest pace in almost three years, a preliminary survey showed on Tuesday, a sign that domestic and overseas demand is improving. The Markit/Nikkei Flash Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 53.5 in February from a final 52.7 in January.

Big Six banks’ earnings results to get a lift from hot markets (TheGlobeAndMail) The Big Six begin reporting their fiscal first-quarter earnings this week, launching into 2017 with a decidedly more hopeful outlook. At this time last year, oil prices had plunged to rock-bottom levels near $30 (U.S.) a barrel, leaving portfolios of energy-related loans mired in uncertainty. And that was before Britain decided to leave the European Union and U.S. voters placed Donald Trump in the White House.

Overnight markets 

Overview: US 10yr note futures are down -0.1879% at 124-15, S&P 500 futures are up 0.21% at 2353, Crude oil futures are up 1.87% at $54.4, Gold futures are down -0.82% at $1229, DXY is up 0.57% at 101.53, CAD/USD is up 0.32% at 0.7606.

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 moving  sharply higher, yields 2-4 bps lower with the US 10Y @ 2.40% (-4.6bps) and the curve 2bps flatter., brisk buying starting in Asia according to MNI,  heavy volume in TY futures (485k ).   Core Euro bonds also higher, flatter, peripherals wider on fears of a Le Pen victory in the French election. GOCs higher, underperforming the rally in the US across the curve. The Cdn bond market closes early in front of the holiday Monday. Provis softer in risk off environment, supply unlikely given early close.

News headlines 

Stocks Decline With Commodities as Pound Slumps: Markets Wrap (Bloomberg) European stocks dropped for a second day as commodity producers tracked declines in oil and metal prices, while the pound weakened after a report showed U.K. retail sales fell in January. French bonds retreated and the euro weakened after two left-wing presidential hopefuls discussed a potential single candidacy that would bring about a showdown with Marine le Pen’s anti-euro National Front. A gauge of commodities headed for the lowest close in more than a week, dragged down by industrial metals which were hurt by signs of tightening liquidity in top consumer China. The pound headed for the lowest level in a month.

Oil prices slip as high stocks overshadow OPEC cuts (Reuters) Oil slipped on Friday, pressured by growing global stocks, while expectations that an oil output cut by producers might eventually balance the market helped to underpin prices. Brent crude futures were trading at $55.57 per barrel at 0945 GMT, 8 cents below their last close. U.S. West Texas Intermediate (WTI) crude futures were down 4 cents at $53.32 per barrel.

Likely sixth loss in eight weeks weakens faith in dollar rally (Reuters) The dollar was stuck near a one-week low against a basket of currencies on Friday after upbeat economic data failed to lift Treasury yields, with concerns about policy under president Donald Trump quelling hopes of a new rally in the currency.

Carney, Wrong on Brexit, May Have Called Consumer Collapse Right (Bloomberg) The U.K. consumer finally appears to be cracking — potentially taking Britain’s economic strength with it. Retail sales unexpectedly fell for a third month in January, calling into question the key component of the economy’s recent momentum. The decline left both the three-month and annual rates of growth at the slowest in more than three years.

Air Canada posts bigger quarterly loss as fuel costs rise (GlobeAndMail) Air Canada reported a bigger quarterly loss as the airline cut fares to fill seats in long-haul leisure markets. Load factor, which measures how effectively the airline filled seats, fell to 79.9 per cent in the fourth quarter ended Dec. 31 from 81.1 per cent a year earlier.

Enbridge to invest $1.7-billion in German utility’s North Sea wind farm (GlobeAndMail) Canadian energy infrastructure group Enbridge Inc has bought a 49.9 per cent stake in EnBW’s 1.8 billion euro ($1.9-billion) North Sea offshore park Hohe See, EnBW said on Friday.

Overnight markets 

Overview: US 10yr note futures are up 0.3013% at 124-27, S&P 500 futures are down -0.25% at 2339.75, Crude oil futures are down -0.56% at $53.06, Gold futures are up 0.21% at $1244.2, DXY is up 0.17% at 100.61, CAD/USD is up 0.16% at 0.7639.

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 trading higher, yields 1-2 bps lower with longs lagging on the curve & the US 10Y 2.474 (-2bps). Prices off the highs after Feb Phili Fed surged to 43 vs 18 exp., thou Housing Starts were weaker -2.6% vs unch exp. European govt bonds higher, big rally in peripherals led by Spain &Portugal after ECB said in its minutes that ‘limited deviations from capital key were possible and inevitable’. Fed Fischer said the central bank is close to achieving its dual goals repeating Yellen’s view. FRBNY Pres Dudley said removal of accommodation is warranted if the economy evolves as anticipated. GOCs higher in line with tsys, 10Y 1.761%. 5Y benchmark has switched to the March 22s trading 1.194% with the roll (M22/S21) continuing to come in now 4.9 bid from 5.2 at auction yest.  As we noted the 5Y auction was very well received despite a the roll being a full bp flatter on the week. We would highlight the attractiveness of the June 22/5Y roll  which has barely budged at ~5.4bps. Provis opening unch after closing 0.5bps tighter yest  with 10Y Ontario back to the tights of Dec @ 76.5. Expect supply today, Alberta in the mkt with a new 11/15/21 GBP benchmark. CMB 10Y & 5Y FRN yest unch from new issue levels, WI 27 47.5/46.5., CMB 3/15/22 FRN CDOR + 14.5 mid. Enercare (DBRS:BBB) priced $275mm in 5Ys @ 215 OTC (214.8 vs 0.5 3/22) & $225mm 7Ys @ 245 (253 vs 1.5 6/23) – both upsized and a the tighter end of guidance. Both tranches ~15 bps tighter on the break. Enercare’s recent acquisition of Service Experts in the US broadened its reach, and at the same time the firm has increased its focus on the more lucrative rental mkt which has a 2.5x long term EBITDA impact vs outright water heater sales.  Ford Cda (BBB/BBB) issued $750mm 5s @ 147.9 which came in 5bps on the break. This morning Brookfield Infrastructure Partners (S&P BBB+) in the mkt with a 7Y @ 185 +/-5 bps. We had the BIP curve at ~6bps/yr which would value new 7Y closer to 175. So this looks like a decent NIC.

News headlines 

World stocks ride to record high, dollar retreats (Reuters) World stocks hit an all time high on Thursday as the latest round of robust global data matched hopes that major economies like the United States will soon be serving up large helpings of fiscal stimulus. MSCI’s All Country World index, which spans 46 countries, notched the milestone as Wall Street hit its latest record and Asia and Europe consolidated the roughly 10 percent gains both have made since mid-December.

Oil rises after news OPEC could extend output cuts (Reuters) Oil prices rose on Thursday after OPEC sources said the group could extend its oil supply-reduction pact with non-members and might even apply deeper cuts if global crude inventories failed to drop to a targeted level.

BOJ’s Kuroda warns low rates may sow seeds of new financial crisis (Reuters) Bank of Japan Governor Haruhiko Kuroda said low profitability at financial institutions could sow the seeds of a new financial crisis, offering his strongest warning to date of the demerits of aggressive monetary easing pursued by major central banks.

Aussie Unemployment Rate Falls Despite Full-Time Jobs Plunge (Bloomberg) Australia’s labor market is sending mixed signals following lackluster hiring last year, when full-time jobs virtually stagnated as gains were primarily part-time. The unemployment rate held below 6 percent partly due to discouraged job-seekers giving up the hunt, underscoring spare capacity in the labor market.

Canada, United States will focus on bilateral NAFTA negotiations (TheGlobeandMail) Canada and the United States will focus on bilateral negotiations as part of President Donald Trump’s pledge to tweak the North American free-trade deal that governs Canadian commerce, leaving Mexico essentially to fend for itself.

Trudeau Says EU Must Spread Trade’s Benefits or Risk Its Decline (Bloomberg) The trade pact between Canada and the European Union approved this week could be one of the world’s last multilateral trade deals unless policy makers share the benefits more widely, Canadian Prime Minister Justin Trudeau told European lawmakers.

Bombardier revenue misses on weak demand for trains, business jets (Reuters) Canadian plane and train maker Bombardier Inc (BBDb.TO) reported lower-than-expected revenue, hurt by weak demand in its rail and business aircraft units. The company said revenue in the business aircraft division, which makes the Learjet, Global and Challenger business jets, fell 20.9 percent to $1.65 billion in the fourth quarter.

Overnight markets 

Overview: US 10yr note futures are up 0.1134% at 124-4, S&P 500 futures are down -0.16% at 2346.75, Crude oil futures are up 0.53% at $53.39, Gold futures are up 0.5% at $1239.3, DXY is down -0.45% at 100.72, CAD/USD is down -0.31% at 0.7667.

US Economic Data

Canadian Economic Data

There is no major economic news for 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