Commentaires
19/01/2017
Market Update
Tsys still on the back foot with the 10Y 2.44 (+1bp) after stronger eco data (housing starts +11.3%) and after Yellen yest afternoon said the economy is close to the dual mandate goals of full employment and stable inflation, hinting at the possibility of more than two rate increases this yr. Core European bonds in catch-up mode , 10Y gilts 4bps higher, bund yields 2-3bps higher with prices off the lows since ECB decision. As expected the ECB left its bond buying unchanged noting QE could be expended if conditions worsen. Draghi press reiterating need for continued monetary stimulus saying underlying inflation remains subdues. GOCs slightly lower on the open, with Can/US 7-10 bps tighter led by the short end after Poloz mentioned further rate cuts should downside risks be realized , citing ‘significant uncertainties’ with respect to trade under the new US administration.
News headlines
Futures flat as countdown to Trump’s inauguration begins (Reuters) U.S. stock index futures were little changed on Thursday, with investors seemingly wary of taking on risk ahead of Donald Trump’s swearing-in as U.S. president on Friday.
ECB keeps rates, asset-buying plan unchanged as expected (Reuters) The European Central Bank left interest rates and the main parameters of its asset purchase scheme unchanged as expected on Thursday, keeping unprecedented stimulus in place to aid the bloc’s slow but steady recovery. Markets now turn their attention to ECB President Mario Draghi’s 1330 GMT news conference.
OPEC Seeks to Quiet Doubts on Supply Cuts as Rally Falters (Bloomberg) When OPEC and Russia meet this weekend to gauge progress on their oil-supply deal, they’ll be trying to dispel the shadow of previous unfulfilled promises. Oil prices rose 20 percent in the month after OPEC agreed to cut output, reaching $54.06 a barrel in New York on Dec. 28. Since then, they’ve slipped almost 5 percent as traders, with one eye on rising U.S. shale production, await proof that OPEC and other producers will live up to their deal. They recall how Russia broke its pledge during cutbacks in 2008, while some members of the producers group failed to fully implement the agreement.
Australian Unemployment Rate Climbs as More Join Search for Work (Bloomberg) Australia’s economy added jobs in December, although not enough to prevent the unemployment rate edging up as participation in the workforce increased. December’s data caps a volatile year for Australian jobs, as declining participation for much of 2016 signaled more spare capacity than improved hiring figures suggested.
Don’t Assume Canada Will Rally With U.S., Poloz Warns Investors (Bloomberg) Bank of Canada Governor Stephen Poloz has a message for those betting Canada’s economy will ride shotgun on the U.S. recovery: think again. Canada’s central bank chief spelled out Wednesday how his economy is still diverging from the U.S. two years after an oil shock took hold. His statements cast doubt on the recent rally in the country’s dollar and bond yields that, in the past, have accompanied similar rallies in the U.S.
Canadian Pacific Railway Ltd chief executive steps down early to pursue opportunities at competitors (Financial Post) It appears that larger-than-life railroad executive Hunter Harrison isn’t quite ready to head back to his horse farm. Canadian Pacific Railway Ltd. announced Wednesday that Harrison, 72, will step down immediately. He had originally planned to retire in July, but now intends to “pursue opportunities involving other Class 1 railroads,” CP said, using the industry term to refer to the largest North American railways by revenue.
Overnight markets
Overview: US 10yr note futures are down -0.426% at 124-6, S&P 500 futures are down -0.04% at 2265.5, Crude oil futures are up 0.96% at $51.57, Gold futures are down -0.96% at $1200.5, DXY is up 0.55% at 101.49, CAD/USD is down 0% at 0.7535.
US Economic Data
| 8:30 AM | Housing Starts, Dec, 1226k, est. 1188k (prior 1090k, revised 1102k) |
| Housing Starts, m/m, Dec, 11.3%, est. 9.0% (prior -18.7%, revised -16.5%) | |
| Building Permits, Dec, 1210k, est. 1225k, (prior 1201k) | |
| Building Permits, m/m, Dec, -0.2%, est. 1.1% (prior -4.7%) | |
| Initial Jobless Claims, Jan 14, 234k, est. 252k (prior 247k, revised 249k) | |
| Continuing Claims, Jan 7, 2046k, est. 2075k (prior 2087k, revised 2093k) | |
| Philadelphia Fed Index, Jan, 23.6, est. 15.3 (prior 21.5) | |
| 9:45 AM | Bloomberg Consumer Comfort Index, Jan 15, (prior 45.1) |
| Bloomberg Economic Expense, Jan, (prior 53.5) |
Canadian Economic Data
| 8:30 AM | Int’l Securities Transactions, Nov, 7.24b, prior (15.75b, revised 15.77b) |
| Manufacturing Sales, m/m, Nov, 1.5%, est. 1.0% prior (-0.8%, revised -0.6%) |
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
18/01/2017
Market Update
US tsys lower, near lower end of range, yields 2-3.5 bps higher led by longs, with the 10Y 2.36%, prices steady after in line CPI. Stock futures slightly higher (S&P +0.177%), while European equities are mixed. TY futures sliding since Asian session on above avg volume (>300k), risk on tone following Citi 7 GS earnings both beat, with GS seeing a fourfold increase in net income on a 78% surge in bond trading revenues. UK gilt yields higher after bette than expected employment data and a disappointing 5Y gilt auction. Bunds lower, large block trade in bund futures (700mln equiv) while earlier widening in peripheral debt has reversed on strong order book for Italy 15Y syndication. GOCs lower before BOC decision, provis steady after finally improving 1-1.5bps yest on the back of a well received Sask long issue (2048 reopen @ Onts + 11.5),. We don not expect any change from BOC today -economic data have been mixed: trade & employment data have improved yet the output gap remains stubbornly high
News headlines
Futures flat ahead of Goldman results, Yellen speech (Reuters) U.S. stock index futures were little changed on Wednesday ahead of another set of big bank earnings and Federal Reserve Chair Janet Yellen’s speech. Goldman Sachs (GS.N) and Citigroup (C.N) are scheduled to report results before market opens. Goldman, like most of the big U.S. banks that have reported results so far, is expected to post a jump in quarterly profit as the U.S. presidential election in November boosted trading activity.
Rising U.S. shale-oil output threatens OPEC’s production pact (Market Watch) The oil market got a stark reminder Tuesday that rising oil production in the U.S. could upend efforts by major producers to bring global supply and demand for crude back in to balance. Just ahead of the settlement for oil futures prices CLG7, -1.77% on the New York Mercantile Exchange on Tuesday, the Energy Information Administration released a report on drilling productivity—forecasting a monthly rise of 41,000 barrels a day in February oil production to 4.748 million barrels a day.
China urges U.S. to bar Taiwan delegation from Trump inauguration (Reuters) The United States should not allow a delegation from Taiwan to attend U.S. President-elect Donald Trump’s inauguration, China’s Foreign Ministry said on Wednesday, raising a new bone of contention in Beijing’s relations with the incoming government. Trump broke with decades of precedent last month by taking a congratulatory telephone call from Taiwan President Tsai Ing-wen, and he has also said the « One China » policy was up for negotiation, a position Beijing strongly rejected.
No Brexit hit yet for UK workers as pay growth accelerates (Reuters) British workers saw their pay grow at the fastest pace in more than a year in the three months to November, official data showed on Wednesday, adding to signs that the country’s economy ended 2016 strongly despite the shock of the Brexit vote.
IEA Sees Significant Gains in U.S. Shale Oil as Prices Rise (Bloomberg) Oil-price gains will trigger a “significant” increase in U.S. shale output as OPEC and other producers rein in supply, according to the head of the International Energy Agency. “U.S. shale-oil production will definitely react strongly,” Executive Director Fatih Birol said Wednesday in a Bloomberg Television interview in Davos, Switzerland. At $56 to $57 a barrel, “a lot of shale plays in the United States would make perfect sense to produce.”
Canada given advance notice of Trump’s NAFTA demands (TheGlobeAndMail) Billionaire investor Wilbur Ross, chosen by U.S. president-elect Donald Trump to reshape U.S. trade policy, has informed Canada that rules of origin and independent dispute tribunals will be central to talks aimed at resetting the North American free-trade agreement.
Overnight markets
Overview: US 10yr note futures are down -0.3244% at 124-27, S&P 500 futures are up 0.19% at 2267, Crude oil futures are down -1.45% at $51.72, Gold futures are down -0.01% at $1212.8, DXY is up 0.51% at 100.84, CAD/USD is up 0.59% at 0.762
US Economic Data
| 8:30 AM | CPI, m/m Dec, 0.3%, est. 0.3% (prior 0.2%) |
| CPI Ex Food and Energy, m/m, Dec, 0.2%, est. 0.2% (prior 0.2%) | |
| CPI, y/y, Dec, 2.1%, est. 2.1% (prior 1.7%) | |
| CPI Ex Food and Energy, y/y, Dec, est. 2.2% (prior 2.1%) | |
| 9:15 AM | Industrial Production, m/m, Dec, est. 0.6% (prior -0.4%) |
| Capacity Utilization, Dec, est. 75.4% (prior 75.0%) | |
| 10:00 AM | NAHB, Housing Market Index, Jan, est. 69 (prior 70) |
| 4:00 PM | Total Net TIC Flows, Nov, (prior $18.8b) |
| Net Long-term TIC Flows, Nov, (prior $9.4b) |
Canadian Economic Data
| 10:00 AM | Bank of Canada Rate Decision Announcement, Jan 18, est. 0.50%, (prior 0.50%) |
| Bank of Canada Releases January Monetary Report |
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
17/01/2017
Market Update
US tsys sharply higher, yields 4-6 bps lower,10Y 2.34%, S&P futures down 0.39%, GBP surging 2.5% – the largest gain since 2008 after UK PM May confirmed the UK will quit the European single market in a ‘hard brexit’. Tsys off the highs after weaker Empire Manuuf Index, the 10Y reached 2.30% prior to May’s speech ~7:00am EST.. Yet May’s tone was seen as more conciliatory as she said she wanted the UK to remain a global trading partner. Core European bonds higher, gilts lagging the rally in bunds as gilts have almost completely reversed o/n gains. Fed Dudley , in speech in NYC said the Fed is unlkely to ‘snuff out’ the expnasion anytime soon. GOCs higher, spds 2-3bps wider vs tsys, 10Y 1.65%. Pembina (BBB) in the mkt with 2 tranche 7Y and longs. for $500mln. Provis heavy for a 4th day, as rates rally, Sask 30Y at 12 + Onts rumoured but already well spoken for already.
News headlines
May Pledges Vote on Brexit Taking U.K. Out Of EU’s Single Market (Bloomberg) Prime Minister Theresa May pledged to pull Britain out of the European Union’s single market while staying inside parts of its customs union, saying the U.K. parliament will get a vote on the final Brexit deal.
Dollar Drops on Trump Comments as May Boosts Pound: Markets Wrap (Bloomberg) The dollar weakened and gold advanced with bonds after the President-elect said the U.S. currency is already “too strong.” The pound rallied as British Prime Minister Theresa May laid out plans to leave the European Union.
Oil up on Saudi commitment to cut; U.S. output seen rising (Reuters) Oil prices settled up on Monday, as Saudi Arabia’s commitments to reducing production offset a report forecasting U.S. output would again rise this year. The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by 1.2 million barrels per day (bpd) to 32.5 million bpd from Jan. 1 in an attempt to clear a global oversupply that has depressed prices for more than two years.
Chinese leader pushes back against Trump on free trade (Reuters) Chinese President Xi Jinping offered a vigorous defense of globalization and free trade in a speech at the World Economic Forum in Davos on Tuesday, which underscored Beijing’s desire to play a greater global role as the United States turns inward.
Hyundai Motor to boost U.S. investment as automakers respond to Trump (Reuters) The Hyundai Motor Group said it plans to lift U.S. investment by 50 percent to $3.1 billion over five years and may build a new plant there – the latest auto firm to announce fresh spending after President-elect Donald Trump threatened to tax imports.
Germany says NATO concerned about Trump ‘obsolete’ remark (Reuters) Germany’s Foreign Minister said on Monday that U.S. President-elect Donald Trump’s comments that NATO was obsolete had aroused concern across the 28-member alliance. Frank-Walter Steinmeier, speaking after a meeting with alliance Secretary-General Jens Stoltenberg in Brussels, said Trump’s remarks contradicted views expressed by designated Defense Secretary James Mattis. He spoke also of « amazement ».
Overnight markets
Overview: US 10yr note futures are up 0.313% at 125-6, S&P 500 futures are down -0.4% at 2263.5, Crude oil futures are up 1.58% at $53.2, Gold futures are up 1.38% at $1212.7, DXY is down -0.55% at 100.62, CAD/USD is down -0.82% at 0.7652.
US Economic Data
| 8:30 AM | Empire Manufacturing, Jan, 6.5, est. 8.5 (prior 9.0, revised 7.6) |
| 8:30 AM | Revisions: NY Fed Empire Manufacturing |
Canadian Economic Data
There is no major economic data release for today
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.Disclosure and Disclaimer
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