Commentaires

Market Update

Tsys midly weaker , narrow o/n range , decent volume in TY futures (335k), US 10Y 2.33 (+2bps). No reaction  to stronger than Core Euro bonds weaker as well, yields 1-2 bps higher, 10Y bund 0.198%. French yields lower for a fourth day, poll suggest Le Pen is lagging.  The latest CFTC COT report for Feb 21stshowed large specs adding to net shorts in FF and Edlrs, while paring net shorts in the 10Y note by 39k to -302k (from record short -395k week of Jan 13th). GOCs weaker, outperforming tsys out to ten yrs, longs lagging on the GOC curve for a third day, 10s30s 72.2. Provis unch from Friday – spds closing 1-2bps tighter on the week. Corps on the back foot as well for change, weighed by fin’ls despite stonger earnings from RY (stock -1.7%) and CM (stock -0.69%). BCE new issue (7s & longs) closed 2 wider as well after tightening 3-4bps on the break.

News headlines

Politics Reigns as French Bonds Gain, Pound Slips: Markets Wrap (Bloomberg) Politics deepened its hold on markets, after French electoral polls boosted the country’s bonds and reports of a potential Scottish independence referendum sank the British pound. The dollar was little changed before a key speech from U.S. President Donald Trump.

Oil gains as bullish bets on rising prices hit record high (Reuters) Oil prices rose on Monday as investors showed record confidence in prices rising further, though gains were capped by the prospect of faster growth in U.S. oil production. Brent crude oil LCOc1 rose 52 cents to $56.51 a barrel by 1224 GMT, while U.S. West Texas Intermediate CLc1 added 42 cents to $54.41.

China FX regulator says strengthening supervision of forex market (Reuters) China’s foreign exchange regulator said on Monday that it will strengthen supervision of the forex market in 2017, while improving policy transparency and promoting the further opening of financial markets. Chinese authorities have taken a raft of steps in recent months to curb capital flight from the country to support the weakening yuan currency, while trying to attract more foreign investment.

LSE scuppers Deutsche Boerse merger hopes by rejecting EU demand (Reuters) The London Stock Exchange (LSE.L) has all but ended a planned merger with Deutsche Boerse (DB1Gn.DE) to create Europe’s biggest stock exchange by ruling out a European antitrust demand, saying it has strong prospects alone. In a bid to create a European trading powerhouse that would better compete against U.S. rivals making inroads on their home turf, the two exchanges struck a 29 billion euro ($30.1 billion) deal just over a year ago.

Trillions of Dollars on the Line When Trump Speaks to Congress This Week (Bloomberg) Donald Trump’s address to Congress on Tuesday is taking on the importance of a State of the Union speech when it comes to U.S. financial markets. For investors relying on more than a year of campaign promises of a pro-growth agenda to push U.S. stocks to record highs, the dollar surging and bond yields climbing, the prime-time speech to House and Senate lawmakers couldn’t come any sooner.

Foreigners’ Bets on Canada’s Housing Market Start With Its Banks (Bloomberg) One puzzle around the run-up in Canadian home prices is the extent to which foreign money is the driver. The idea is that rich people from places like China are buying up homes as an investment with no intention of ever living in Canada, pushing up the cost of housing for every one else.

Overnight markets 

Overview: US 10yr note futures are down -0.124% at 125-15, S&P 500 futures are down -0.02% at 2364.5, Crude oil futures are up 0.89% at $54.47, Gold futures are down -0.13% at $1256.7, DXY is down -0.09% at 101, CAD/USD is up 0.12% at 0.7629.

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 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