Commentaires

Market Update

Tsys  lower trading at the low end of o/n range , yields 2-3 bps higher 10Y 2.484%  after ADP came in +246K vs 168K exp. FOMC decision at 2pm, no change expected and there is no news conf yet statement will be closely watched for clues as to timing of future rate hikes. Core European bonds lower, pressured by rise in peripheral yields led by Spain & Italy.  GOCs lower , spds -12 bps wider vs tsys as prices react more to pressure in EU bonds. Provis  unch to start focus on Ontario 5Y global.

News headlines        

Futures rise on Apple rally; Fed meeting in focus (Reuters) U.S. stock index futures rose on Wednesday, in an upbeat start to February, buoyed by strong earnings from Apple, while investors awaited the Federal Reserve’s decision on interest rates.

Oil edges further above $55 on Russia, OPEC cuts (Reuters) Oil edged further above $55 a barrel on Wednesday supported by signs that Russia and OPEC producers are delivering on promised supply reductions, although a report showing a large rise in U.S. crude inventories limited gains.

China January factory activity expands for sixth month at modest pace but risks loom (Reuters) China’s manufacturing sector expanded for the sixth month in a row in January as the world’s second-largest economy continued to benefit from record bank lending and a construction boom.

Fed’s message on portfolio trimming: prepare, don’t fret (Reuters) Federal Reserve policymakers are putting markets on notice that the central bank’s $4.5 trillion balance sheet is back on the agenda in an apparent effort to give investors time to prepare for changes rather than to signal any action is imminent.

BoC looks to overhaul ‘off track’ forecasting tools, Poloz says (TheGlobeAndMail)  The Bank of Canada has launched a multiyear effort to overhaul the sophisticated computer models it uses to forecast the economy after they failed to foreshadow the deep and persistent aftershocks of the global financial crisis. Governor Stephen Poloz acknowledged Tuesday that its forecasting tools have been pushed “persistently off track” in the decade since the 2007-09 crisis, leading to missed targets on inflation and other indicators.

Apple defies Wall Street with strong revival in iPhone sales. (Reuters) Apple Inc reclaimed the throne as the world’s top smartphone seller for the first time in five years on Tuesday, beating out rival Samsung in units shipped for the holiday quarter and boosting revenues with a strong showing for its new, top-of-the-line iPhone 7 Plus. The iPhone sales numbers, and a profit of almost $18 billion, both handily beat Wall Street expectations, sending its shares up 3 percent in after-hours trading.

Overnight markets 

Overview: US 10yr note futures are down -0.2511% at 124-5, S&P 500 futures are up 0.26% at 2280.5, Crude oil futures are up 0.89% at $53.28, Gold futures are down -0.26% at $1208.2, DXY is up 0.24% at 99.746, CAD/USD is up 0.34% at 0.7648.

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 1-1.5bps lower 10Y 2.477% . Prices fell in Europe after rising initially in Asia on news that Trump had fired his AG, as well as month end buying as the estimated extension in the BB Barclays Tsy Index is 0.07yrs.  Yet gains evaporated on strength in EU CPI, Spanish CPI . GOCS coming under pressure after Nov GDP came in above exp 0.4% vs 0.3% exp, led by a 1.4% rebound in manufacturing. Ontarios getting lifted across the curve on screen, Ont 26s @ 80.5, Ont 48s @92 after closing slightly tighter yest. Ont 26 81.5/81, QC/Ont 26 2/1 back to 3 mnth narrows. Perphiral spds another 0.5bps tighter yest led by Alta, MP.

News headlines

Bonds Slump as Inflation Tilts Bets Toward Stocks: Markets Wrap (Bloomberg) European bonds fell and stocks rose as inflation data prompted investors to switch into assets that may benefit from a regional economic revival. Gold advanced as Donald Trump’s firing of the U.S. acting attorney general added to concern over the unpredictability of decisions in the new administration.

German Unemployment Falls to Record Low as Economy Gathers Pace (Bloomberg) German unemployment fell to a record low in January in a sign that Europe’s largest economy is gathering momentum. The jobless rate declined to 5.9 percent, the lowest level since reunification, as the number of people out of work slid by a seasonally adjusted 26,000 to 2.61 million, data from the Federal Labor Agency in Nuremberg showed on Tuesday

BOJ upgrades growth forecasts, warns of risks to inflation outlook (Reuters) The Bank of Japan raised its growth projections on Tuesday but warned that prospects for hitting its 2 percent inflation target remained uncertain, suggesting policy makers were wary about Corporate Japan’s willingness to lift wages seen as vital to boosting domestic demand.

Euro-Area Inflation Surges to 1.8%, Intensifying ECB Debate (Bloomberg) Euro-area inflation accelerated more than forecast to effectively reach the European Central Bank’s goal, which may intensify a debate among policy makers about their long-running stimulus programs.

Euro jumps after ‘grossly undervalued’ comment from Trump advisor (Reuters) The euro jumped against the dollar on Tuesday after U.S. President Donald Trump’s trade advisor told the Financial Times that Germany was benefiting from a « grossly undervalued » euro.

Overnight markets

Overview: US 10yr note futures are down -0.0126% at 124-7, S&P 500 futures are down -0.21% at 2271.25, Crude oil futures are up 0.67% at $52.98, Gold futures are up 0.94% at $1207.3, DXY is down -0.44% at 99.985, CAD/USD is down -0.59% at 0.7667.                                                                                  

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 mixed, slightly higher out to five years with the back end lagging, curve 1bp steeper, 10Y 2.49%. Little reaction to PCE which came in below exp (0.3% vs 0.4%). Prices off the lows after Jan German inflation came in below exp(1.9% vs 2.0%) . Peripheral debt sharply lower, Italy yields 6-12bps higher, Spain 3-5bps – Unicredit shares down 6% on reports ECB requested revised strategic plan to improve capital ratios, belly of the BTP curve hit the hardest as long end benefits from month end extensions. Latest CFTC COT report showed large specs paring back shorts in the FF, Eurodollars 5s & 10s while scaling back longs/adding to shorts in 2s, 30s and ultra longs. GOCs slightly lower, ~1bp wider in the belly as the US curve is ~2bps steeper. Provis ~1bp wider, Ontario 26s 81/80.5. Ontario 5Y Green bond has backed 2bps since last week.

News headlines 

European Bonds Hit by Inflation as Stocks Retreat: Markets Wrap (Bloomberg) European bonds fell on signs inflation was quickening in Germany and equities retreated. The dollar weakened earlier as Donald Trump’s order halting some immigration reverberated around the world.

Oil steady but U.S. drilling weakens deal to cut output (Reuters) Oil prices were steady on Monday, but news of another increase in U.S. drilling activity spread concern over rising output just as many of the world’s oil producers are trying to comply with a deal to pump less in an attempt to prop up prices.

German inflation hits 3-1/2 year high in January (Reuters) German annual inflation increased further in January, hitting the highest level in three-and-a-half years to reach the European Central Bank’s price stability target of just under 2 percent, preliminary data showed on Monday.

Dutch central bank raises growth forecasts for Netherlands (Reuters) The Dutch central bank on Monday upgraded its forecast for economic growth in 2017 to 2.3 percent, up from a previous 1.9 percent in June, citing strong domestic consumption, falling unemployment and a rebounding housing market.

Russia appeals to WTO over EU duties on Russian steel (Reuters) Russia said on Monday it was appealing to the World Trade Organization to settle a dispute with the European Union over anti-dumping duties imposed on its steelmakers. The EU in August introduced duties of up to 36.1 percent on Russian cold rolled steel, a product used in the construction and automotive industries, following allegations Russian steelmakers were exporting at unfairly low prices. It also imposed duties on Chinese cold rolled steel.

Why smaller banks take bigger slice of the growing medical marijuana business (Financial Post) The buzz around the cannabis business in 2016 reached an inflection point with medical marijuana companies raising more than $466 million on Canadian capital markets last year.

Canadian tech firms ask Ottawa to give immediate visas after U.S. ban (Reuters) A group of Canadian technology company founders, executives and investors on Sunday called in a letter for Ottawa to immediately give temporary residency to those displaced by a U.S. order banning the entry of people from seven Muslim-majority countries.

Overnight markets 

Overview: US 10yr note futures are up 0.0503% at 0-0, S&P 500 futures are down -0.36% at 2280.75, Crude oil futures are down 0% at $53.17, Gold futures are up 0.27% at $1194.3, DXY is up 0.29% at 100.82, CAD/USD is down -0.2% at 0.7618.

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