Commentaires

Market Update

Tsys prices open NY higher, but well off 2am ET highs, after FX-tied buying in Asia was followed by UK drift. High-grade corporate bond issuance busy. US ADP sees 153’000 for December private Payrolls. Treasuries gain mildly on softer than expected ADP, 10Y note now is at 2.432%.

News headlines 

Dollar Rally Stymied by China, Fed as Gold Climbs: Markets Wrap (Bloomberg) The dollar faced further headwinds as Chinese efforts to stem capital outflows and the Federal Reserve conspired to halt the strongest rally in the currency in more than a decade. Gold rose.

Oil prices rise as Saudi Arabia discusses supply cuts (Reuters) Oil prices rose on Thursday after Saudi Arabia started talks with customers about a reduction in crude sales to support a plan by OPEC to reduce global supply. The Organization of the Petroleum Exporting Countries promised in November to cut output to help prop up prices.

China’s yuan soars against dollar as liquidity tightens offshore (Reuters) China’s yuan soared against the U.S. dollar on Thursday following a sharp rise in the offshore spot rate as China worked to stem capital flows and stabilise the currency ahead of Donald Trump’s inauguration as U.S. president and the Lunar New Year.

Canadian, U.S. car sales hit record levels in 2016 (TheGlobeAndMail) Canadians and Americans wore out the showroom floors of car dealerships in 2016, driving auto makers to record sales years in both markets. Auto makers sold 1.95 million vehicles in Canada, the fourth consecutive year that sales have hit a record. The 2016 level was achieved despite a plunge in oil prices that sent sales tumbling in Alberta, the third largest market in the country

UK services sector grows at fastest pace for more than a year (TheGuardian) Britain’s services sector grew at the fastest pace for 17 months in December, according to a survey that has raised hopes for a strong end to 2016 for the economy. There was also a pick-up in new business and job creation, according to the poll of firms from the UK’s biggest sector, which includes banks, hotels and transport. But news that companies increased their prices at the fastest pace for more than five years will intensify worries over the weak pound stoking inflation in the months ahead and raises the prospect of interest rates going up this year.

Toronto Housing Has a Record Year Amid Supply Shortages (Bloomberg) Toronto’s housing market posted a record year in 2016 that saw double-digit price gains, tightening supply and the cost of an average home surpass C$700,000 ($526,355) for the first time. Sales figures released Thursday by the Toronto Real Estate Board show the city’s realtors sold C$82.6 billion worth of homes last year, an increase of almost C$20 billion from 2015. Unit sales rose 12 percent and prices increased by more than C$100,000 to an average C$729,922. That’s up 17 percent from last year — the largest annual gain since 1989.

Top Forecaster Sees Loonie Extending G-10’s Best Advance in 2017 (Bloomberg) The Canadian dollar will strengthen in 2017 as the country’s economy accelerates in the second half of the year and worries over U.S. President-elect Donald Trump’s trade policies fade, according to the most accurate forecaster of the currency.

Overnight markets  

Overview: US 10yr note futures are up 0.1637% at 124-10, S&P 500 futures are down -0.15% at 2260.75, Crude oil futures are up 0.73% at $53.65, Gold futures are up 0.88% at $1175.5, DXY is down -0.42% at 102.27, CAD/USD is down 0% at 0.7519.

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 Treasuries open NY mainly lower, 30Y exception, curvesflatter, 10Y 2.454%. TOKYO saw Japan’s Nikkei stock index +2.5% in catchup with US rise, pressuring Tsys mildly. Early Asia saw Asian real$ and bank portfolios selling 2Y Tsys, foreign central bank sold 2s. Foreign central bank buying in 3s and 5s, 2way in 10s and Asian buying of 10Y, Asian real money buyng in 30Ys. Asian selling arose in 5Y, 7Ys.

News headlines

U.S. stock futures rise ahead of Fed minutes (Reuters) U.S. stock index futures were slightly higher on Wednesday as investors awaited the release of the minutes of the Federal Reserve’s December meeting in which the central bank raised interest rates. The Fed raised rates for the first time last year, citing strength in the labor market and a slight uptick in inflation. Investors will be keen to assess policymakers’ view on inflation, especially after a spate of strong economic data.

Oil prices rise on expected drop in U.S. inventories (Reuters) Oil prices ticked higher on Wednesday on expectations that U.S. crude inventories are falling and signs that oil producers will stick to agreed output cuts that took effect this week. Global benchmark Brent crude futures LCOc1 were up 10 cents at $55.57 a barrel by 1110 GMT (6:10 a.m. ET). The contract reached an 18-month high in the previous session, but a strong dollar has shaved off most of those gains.

Euro-Area Inflation Outpaces Expectations as Oil Surges (Bloomberg) Euro-area inflation accelerated in December at the fastest pace since 2013, suggesting that a debate about the appropriate degree of European Central Bank stimulus is about to gather momentum.

China Said to Consider Options to Back Yuan, Curb Outflows (Bloomberg) China has studied possible scenarios for the yuan and capital outflows this year and is preparing contingency plans, according to people familiar with the matter. The offshore yuan surged the most in a year.

Trump Tariff on GM Would Violate Nafta. That May Not Stop Him (Bloomberg) As president, Donald Trump won’t be able to punish General Motors Co. for building cars in Mexico without violating Nafta. That may not stop him from taking an unprecedented step against an American company. Trade experts agree that presidents have wide latitude to impose penalties on imports, at least temporarily, even if courts later find them unlawful.

Investment banking fees fall 7 percent in 2016 dragged down by equity raisings (Reuters) Investment banking fees fell 7 percent worldwide in 2016, dragged down by a 23 percent fall in equity capital market (ECM) fees, Thomson Reuters data showed on Wednesday, raising the pressure on banking giants fighting to restore profitability.

Overnight markets     

Overview: US 10yr note futures are down -0.1385% at 123-30, S&P 500 futures are up 0.23% at 2257.75, Crude oil futures are up 0.67% at $52.68, Gold futures are up 0.32% at $1165.7, DXY is down -0.28% at 102.92, CAD/USD is down -0.79% at 0.7507.

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 Treasuries opened NY weaker, steeper after overnight slide began around 2am ET as UK markets reopened US Tsys after New Year’s holiday. US 10-year note is off 20/32 at 95-18, 2.511% yield, 2Y note is at 1.234%, 100-01/32; 5/30Y is mildly steeper at +113.3 bps. US Eurodollar futures lower but off the day’s weakest levels. US stock index futures positioned to open higher. US high-grade corporate bonds could see Westpac Banking (Aa2/AA-) 5Y fixed & 5Y FRN, and a BNP Paribas (Baa2/A-) senior 7Y note (with EUR benchmark 7Y note come to market Tuesday. Oil Futures rose as much as 2.8 percent after adding 45 percent last year, the biggest annual gain since 2009. Officials from Oman and Kuwait told local media they’re cutting oil production in January, fulfilling pledges that they and 22 other producers made on Dec. 10. Prices also advanced as China’s manufacturing purchasing managers index stabilized near a post-2012 high, signaling demand may be supported in the world’s second-biggest oil user.

News headlines 

Stocks Gain With Commodities Amid China Optimism: Markets Wrap (Bloomberg) Stocks rose with commodities on signs China’s economy is strong enough for policy makers to keep pushing for economic reforms in 2017. Crude touched an 18-month high and the dollar rallied as bonds fell.

Oil Climbs to 18-Month High as Kuwait and Oman Fulfill OPEC Cuts (Bloomberg) Oil climbed to an 18-month high in New York as output cuts by Kuwait and Oman signaled OPEC and its partners are delivering on their agreement to stabilize the market.

UK manufacturing growth at a 30-month high, says PMI survey (TheGuardian) Britain’s manufacturers ended 2016 on a strong note, according to a survey that signalled the fastest growth in the sector for more than two years and indicated that the weak pound had boosted exports.

 Global banking regulators postpone approval of new rules (Reuters) Global banking regulators on Tuesday postponed the approval of new capital rules designed to avert a repeat of the financial crisis, saying they needed more time to finalize the long-awaited and contentious reform.

Trump Taps China Critic Lighthizer for U.S. Trade Representative (Bloomberg) President-elect Donald Trump has picked lawyer Robert Lighthizer to head the U.S. Trade Representative office, his transition team said Tuesday in a further sign the incoming administration will take a tougher line on China.

BMO’s Belski Bets on Trump After Nailing Canada’s 18% Stock Gain (Bloomberg) Brian Belski, chief investment strategist at Bank of Montreal, said few believed him last year when he forecast Canadian stocks would emerge from their 2015 drubbing to rocket 18 percent in 2016, outperforming the U.S. for the first time in six years. Today, he’s vindicated.

Overnight markets                                                                     

Overview: US 10yr note futures are down -0.4777% at 123-22, S&P 500 futures are up 0.69% at 2251.75, Crude oil futures are up 2.38% at $55, Gold futures are down 0% at $1151.7, DXY is up 0.63% at 103.43, CAD/USD is up 0.04% at 0.7436.

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