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12/05/2016

by admin | May 12, 2016 | comments

Market update

US tsys lower, curve steeper , 10Y 1.746 (+2.1bps), heavy volume in TY futures (350K). Tsys pressured lower since Europe after the 10Y reached a new low yield 1.715 ~3:00AM. Little reaction to jump in claims, lower import prices. European stocks higher, crude 1.0% higher close to $47.00. Core Euro bonds lower weighed by risk on rally in stocks & higher crude. GOCs lower with tsys, lagging the bounce in tsys after home prices came in better than exp for March (0.2% vs 0.1%). Provi spds unch, Alta46/Ont46 20.5/19.5 – no reaction to higher crude. We have seen more interest in Bas & Ont/CMB FRNs from clients wishing to put away s.t. cash, instead of buying short GOCs. This makes a lot of sense – Ont 2Y bonds basically trade flat on ASW while ONT FRNs ~10-15bps cheaper.

News headlines

Stocks Advance With Crude on Oil Demand Forecast; Krone Surges (Bloomberg) European stocks rose with U.S. equity-index futures, buoyed by an increase in oil prices after the International Energy Agency softened its forecast for a global supply surplus. Norway’s krone jumped and South Africa’s rand also strengthened. The Stoxx Europe 600 Index reversed a drop of as much as 1 percent, overcoming a drag from companies including LafargeHolcim Ltd. that posted lower earnings. Crude gained for a third straight day as the IEA said robust demand in India and other emerging nations would support demand for oil
Oil rises toward six-month high after IEA sees tighter supply (Reuters) Oil prices rose toward six-month highs on Thursday, supported by data from the International Energy Agency (IEA) showing tightening supply in addition to a surprise drop in U.S. crude inventories. Brent crude futures LCOc1 were trading at $47.87 per barrel at 1101 GMT, up 27 cents from their last settlement and near a six-month high of $48.50 hit at the end of April. West Texas Intermediate (WTI) U.S. crude futures CLc1 were 35 cents higher at $46.58.
Outlook for oil brightens as output disruptions erode surplus: IEA (Reuters) Unplanned disruptions to oil output could help run down a global overhang of unused crude this year, while demand will profit from growing gasoline consumption particularly in India and China, the International Energy Agency said on Thursday. The IEA said output from non-OPEC producers is expected to fall by 800,000 barrels per day (bpd) in 2016, an acceleration from the agency’s previous forecast for a fall by 710,000 bpd.
Bank of England Holds Rate at Record Low and Strengthens Brexit Warning (Bloomberg) The Bank of England cut its growth forecasts and issued its strongest warning yet that a vote to leave the European Union would hurt the economy. With just six weeks to go until Britain’s referendum, the nine-member Monetary Policy Committee, led by Governor Mark Carney, said there were more signs it was weighing on growth and clouding the outlook. Officials unanimously agreed to maintain their benchmark rate at a record-low 0.5 percent, saying inflation remains subdued.
Fed to delay rate hike until September on tame inflation outlook: Reuters poll (Reuters) The U.S. Federal Reserve will likely wait until September before raising interest rates again, stretching to nine months the time since its first hike in nearly a decade, as it waits for clear signs inflation is picking up, a Reuters poll found. This is the second time this year that economists have delayed their rate-hike expectations, casting doubt on the likelihood the Fed will be able to deliver two rate hikes this year as the U.S. Presidential election in November could make further policy changes sensitive.
Canadian natural gas prices hit lowest level on record as Fort McMurray fires curtail demand (Financial Post) Canadian natural gas prices are the latest casualty of Fort McMurray wildfires, falling this week to their lowest level on record. Alberta’s natural gas demand fell to its lowest level in a year, after oilsands facilities in Fort McMurray were shut down by a raging fire that forced the evacuation of the entire town. Oil producers need natural gas for upgrading and for gas-fired cogeneration plants, among other uses.
Brazil Senate puts Rousseff on trial, ending 13 years of leftist rule (Reuters) Brazil’s Senate voted on Thursday to put leftist President Dilma Rousseff on trial in a historic decision brought on by a deep recession and a corruption scandal that will now confront her successor, Vice President Michel Temer. With Rousseff to be suspended during the Senate trial for allegedly breaking budget rules, the centrist Temer will take the helm of a country that again finds itself mired in political and economic volatility after a recent decade of prosperity.

Overnight markets

Overview: US 10yr note futures are down -0.2268% at 130-20, S&P 500 futures are up 0.51% at 2068.5, Crude oil futures are up 0.95% at $46.67, Gold futures are down -0.29% at $1271.8, DXY is up 0.17% at 93.983.

US Economic Data

8:30 AM: Import Price Index, m/m, April, 0.3%, est. 0.6% (prior 0.2%, revised 0.3%)
- Import Price Index, y/y, April, -5.7%, est. -5.4% (prior -6.2%, revised -6.1%)
- Initial Jobless Claims, May 7, 294k, est.270k (prior 274k)
- Continuing Claims, April 30, 2161k ,est. 2120k (prior 2121K)

Canadian Economic Data

8:30 AM: New Housing Price Index, March, 0.2%, est. 0.1% (prior 0.2%)

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

11/05/2016

by admin | May 11, 2016 | comments

Market update

Tsys little changed in range bound session , avg volume in TY futures (278k), US 10Y 1.77%. The USD is lower for the first time in a week, Euro stoxx are down 1.0%, led by 2.0% decline in banks. Core Euro bonds slightly lower, UK gilts giving up early gains on lower than exp increase in March industrial prod. Order book for ultra long 50Y from Apsin said to exceed E10bln at MS + 250. Focus in the US today will be on $23bln 10Y auction at 1:00PM as well as IG corp supply after ~$24bln priced yest including $7bln multi tranche offering from Abbvie (Baa2/A-) & $5bln from Kraft (Baa3/BBB-). Issuance so far this week in the US has already surpassed the YTD avg of $35bln after two trading days. GOCs higher led by 10s, spds 1bp narrower vs tsys, 10Y close to 1.30% resist from mid April. Provi spds 0.5bps wider, supply a possibility yet with GOC yields and spds fairly tight, there is likely to be only lukewarm reception to a 10Y deal , thou with 10s30s steepening into June 1st extension a long deal might have better success at this point.

News headlines

Europe Stocks Drop With U.S. Futures as Banks Slip; Pound Falls (Bloomberg) European equities fell for the first time in three days and U.S. stock index futures declined, as banks and energy producers slid. Shares of raw-materials companies rallied as metals prices climbed. The Stoxx Europe 600 Index headed for its biggest drop in a week. Industrial metals from aluminum to zinc climbed as Glencore Plc forecast demand to exceed supply. Soybeans, silver and gold also gained, while crude pared declines before U.S. inventories data. The pound weakened after disappointing U.K. industrial production data. Spain is selling 50-year bonds, amid a flurry of debt offerings. A Paris-listed exchange-traded fund tracking Brazilian shares rose before the Senate votes on whether to impeach President Dilma Rousseff.
UK factory output records biggest annual fall since 2013 (Reuters) British factory output recorded its biggest annual fall in nearly three years in March, as shutdowns in the steel industry due to global overcapacity led broad-based declines, official figures showed on Wednesday. Manufacturing in March was 1.9 percent lower than a year earlier, the steepest decline since May 2013, the Office for National Statistics said and in line with economists’ predictions in a Reuters poll. In March alone, manufacturing output edged up by 0.1 percent, slightly less than forecast, after dropping by 0.9 percent in February.
Pound Bears Return as Industrial Data Add to U.K. Economy Woes (Bloomberg) Pound bears revived their attack as industrial production data added to signs that problems are mounting for the economy as Britain heads toward a referendum on whether to end its membership of the European Union. Sterling weakened for the first time in three days versus the euro as figures from the Office for National Statistics showed output rose 0.3 percent, less than the 0.5 percent gain predicted in a Bloomberg survey of economists. Factories also increased production by less than forecast. The Bank of England announces its interest-rate decision and releases its latest economic and inflation forecasts on Thursday.
Oilsands production north of Fort McMurray will restart in coming days when ‘safe to do so’ (Financial Post) Production will resume at oilsands projects north of Fort McMurray in the coming days and “short weeks” after an out-of-control wildfire raged through the area, though there is still no timeline for projects south of the city returning to normal operations. “Operations will only restart when it is absolutely safe to do so,” Alberta Premier Rachel Notley said Tuesday after a meeting with the CEOs of oilsands, pipeline and power companies with assets around Fort McMurray.
Oil dips on Canada output prospects, record U.S. stocks (Reuters) Crude prices fell on Wednesday as oil sands production in Canada restarted after forced closures due to wildfires, and as already record-high inventories especially in the United States grew. International Brent crude oil futures LCOc1 were down 28 cents at $45.24 per barrel at 0909 GMT. U.S. West Texas Intermediate (WTI) futures CLc1 were down 44 cents at $44.22 a barrel.
Competition Bureau seeks Canadians’ opinions on BCE proposal to buy Manitoba Telecom Services (Financial Post) The Competition Bureau is asking Canadians for their thoughts on BCE’s proposed deal to buy Manitoba Telecom Services. The federal regulator is reviewing the proposed takeover as well as a side agreement that would see BCE sell a portion of the MTS wireless business to Telus (TSX:T). The bureau says comments can be shared with the regulator through its website.
Brazil Impeachment Vote May Spell Rousseff’s Last Day on Job (Bloomberg) This Wednesday may be the last day in office for President Dilma Rousseff, as Brazil’s Senate gears up for a vote that would force her out and into an impeachment trial she appears unlikely to survive. The Senate debate is scheduled to last 10 hours and end with a vote around 7 p.m. local time, the chamber’s speaker Renan Calheiros said. Surveys by the country’s major newspapers show the opposition has 50 or 51 votes, more than the simple majority of the 81 seats necessary to put her on impeachment trial.

Overnight markets

Overview: US 10yr note futures are up 0.0119% at 130-26, S&P 500 futures are down -0.11% at 2075.25, Crude oil futures are up 0.18% at $44.74, Gold futures are up 1.11% at $1278.9, DXY is down -0.33% at 93.977.

US Economic Data

7:00 AM: MBA Mortgage, 0.4% (prior -3.4%)
2:00 PM: Monthly Budget Statement, April, est. 107.0b (prior 156.7b)

Canadian Economic Data

There is no major economic data for today

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

10/05/2016

by admin | May 10, 2016 | comments

Market update

Tsys trading lower, curve slightly flatter, US 10Y 1.76 (+1bp), with Euro stoxx higher yet off earlier highs after coming down hard ~7:00AM, the USD index higher for a sixth day, crude up slightly 43.88. The US sells $24bln in 3Y notes at 1:00PM, with the WI 3Y 0.88%, trading close to the 0.89% of the last 3Y sale on April 12th – which was the lowest auction yield since Feb. GOCs higher in line with tsys, provi spds unch after closing 1-2bps wider yest. In corps, Allied Properties (BBBL) issued $150MM 6.5Y 3.934% debs @ 300 OTC (original guidance ~305) which quickly narrowed 5-7 bps in secondary trading, proceeds will be used to fund recent acquisition of several properties in Montreal. Allied last came to market last May with its first 5Y issue @ 270 (now ~240).

News headlines

Global Stocks Rise With Commodities; Yen, Treasuries Decline (Bloomberg) Stocks rose around the world as base metals clawed back some of Monday’s losses. The yen and Treasuries declined. The MSCI All Country World Index’s 0.2 percent gain was its biggest in a week as Credit Suisse Group AG boosted European banks and Japanese shares rose. Nickel led a rebound in a Bloomberg measure of raw-materials prices as Japan’s largest supplier forecast a widening shortage. Philippine’s peso jumped the most in seven weeks after Rodrigo Duterte called for “healing” after claiming victory in a presidential election and trading Europe signaled Brazilian markets would rebound as the move to oust President Dilma Rousseff appeared back on track.
Yen Falls a Second Day as Japan Reiterates Ability to Intervene (Bloomberg) The yen weakened for a second day after Japan’s Finance Minister said the government can intervene to stabilize foreign-exchange markets if necessary. Japan’s currency fell against all its Group-of-10 peers after Taro Aso, speaking in parliament in Tokyo Tuesday, reiterated that the U.S. doesn’t object to the Asian nation’s policy. His comments came a day after he said “it’s natural that Japan has means to intervene” in the foreign-exchange markets.
French growth seen cooling in second-quarter, full-year outlook brighter (Reuters) French growth will slow in the second quarter after a strong start to the year, the central bank forecast on Tuesday, but surveys showing a pick up in industrial activity and investment means Paris’s full-year target still looks within reach. The socialist government has banked on a growth rate of 1.5 percent this year to start making a significant dent in unemployment, which at over 10 percent stands in the way of President Francois Hollande’s bid for a second term next year.
Dead-of-Night Reversal Puts Brazil Impeachment Back on Track (Bloomberg) The drive to oust President Dilma Rousseff is back on track after the head of the lower house reversed a decision that had earlier threatened to throw the entire impeachment process into chaos. Lawmaker Waldir Maranhao released a statement in the dead of night revoking his own call to annul impeachment sessions in the lower house. That puts the Senate back in the spotlight, with a vote on whether to put the unpopular president on trial still slated for Wednesday. If successful, it would temporarily remove her from office. Rousseff is charged with illegally using state banks to plug a hole in the budget.
Exclusive: Say goodbye to OPEC, Russia’s Sechin says (Reuters) Internal differences are killing OPEC and its ability to influence the markets has all but evaporated, top Russian oil executive Igor Sechin told Reuters in some of his harshest remarks ever about the oil cartel. Russia, which has been hit hard by the oil price collapse, was flirting with the idea of cooperating with OPEC in recent months until tensions between OPEC members Saudi Arabia and Iran ruined a global deal to freeze output.
CMHC continues to reduce its exposure to the housing market (Financial Post) Canada Mortgage and Housing Corp., the Crown corporation that controls a majority of the mortgage default insurance market in the country, continues to reduce its exposure to the housing market. In its annual reported released Monday, CMHC said its mortgage loan insurance-in-force decreased to $526 billion last year from $543 billion at year-end 2014. It is legislative maximum $600 billion, which had been approaching in previous years.
Eurozone ministers to examine how to ease Greece’s debt burden (TheGuardian) Eurozone finance ministers have promised to examine how to ease Greece’s colossal debt burden, with writing off bad loans remaining off the table. Jeroen Dijsselbloem, the chair of eurozone finance ministers, said he was hopeful of getting an agreement on Greek debt management in talks on 24 May. Ahead of that meeting, technical experts have been asked to examine how to reduce Greece’s crushing debt burden, which is currently about 180% of the country’s annual economic output

Overnight markets

Overview: US 10yr note futures are up 0.0358% at 130-27, S&P 500 futures are up 0.38% at 2062, Crude oil futures are up 0.39% at $43.61, Gold futures are down -0.09% at $1265.4, DXY is up 0.08% at 94.201.

US Economic Data

6:00 AM: NFIB Small Business Economic Trends Survey, April, 93.6, est. 93.0 (prior 92.6)
10:00 AM: Wholesale Inventories, m/m, March, est. 0.1% (prior -0.5%)
- Wholesale Trade Sales, m/m, March, est. 0.5% (prior -0.2%)
- Job Openings & Labor Turnover Survey, March, est. 5450 (prior 5445)

Canadian Economic Data