Commentaires

16/05/2016

par admin | Mai 16, 2016 | commentaires

Market update

US tsys lower, 10Y 1.722 (+2.3bps) on below avg volume, no reaction to weaker than exp May Empire Man. Crude at six month high above 47.00 (+3.8%) on supply fears and Goldman forecast. Fed Lacker said there is a good case for raising rates in June in an article in the Wash Post.. Core Euro bonds mixed, long term bunds lower with oil, gilts slightly higher in the long end. UST yields fell to one month lows last week, capped by a 5bp rally in 10s despite better retail sales & PPI data. Retail stocks had their worst week since April 8th with earnings from Nordstrom, Macys & Kohls all disappointing. Latest CFTC COT May 10th report showed large specs reducing shorts across the curve. GOCs lower with tsys , provi spreads starting the week 1bp wider, after widening ~4bps last week on risk off and $650mln in long supply from Ont & Newf.

News headlines

Oil Climbs to Highest Since November as European Shares Retreat (Bloomberg) Brent crude rose to a six-month high, leading a rebound in commodities and boosting the ruble and mining companies, as supply disruptions in Nigeria added to production woes. Oil extended last week’s gains as Goldman Sachs Group Inc. increased its price forecast, saying the market had moved into a supply deficit earlier than expected. Precious metals rallied with aluminum and commodity producers climbed, while almost all of the other industry groups in the Stoxx Europe 600 Index fell. Irish bonds advanced, outperforming their euro-area peers, while the Polish zloty strengthened after favorable reports from Moody’s Investors Service. Asian stocks rose from a one-month low.
Yen weakens on Japan intervention talk before G7 meets (Reuters) The yen fell on Monday as Japan, readying to host a Group of Seven meeting, again signaled its willingness to intervene in the market, driving the currency to erase early gains made on disappointing Chinese data. Vice finance minister for international affairs Masatsugu Asakawa told the Nikkei newspaper G7 and G20 countries had discussed how to deal with disorderly currency moves, indicating it was a shared understanding that market interventions were justified if exchange rate moves were excessive.
Oil prices rise on Nigeria outages, Goldman forecast (Reuters) Oil prices jumped over 2 percent on Monday to their highest since November 2015 on growing Nigerian oil output disruptions and after long-time bear Goldman Sachs said the market had ended almost two years of oversupply and flipped to a deficit. Brent crude futures were trading at $48.83 per barrel at 1118 GMT, up $1 or 2.05 percent. U.S. crude futures were up 98 cents, or 2.08 percent, at $47.19 a barrel.
Why China’s private sector needs a ‘high degree of attention’ (Reuters) Xia Xiaokang and Bruno Chen, who both run private-sector companies, are the sort of businessmen that Chinese leaders are increasingly concerned about as economic growth slows. Beijing is counting on the private sector to invest more in the economy and take up the slack as the government tries to engineer a shift away from largely state-run heavy industry to more entrepreneurial and services-led growth.
Platinum Seen Over Worst as Bulls Wager on Automaker Demand (Bloomberg) There’s a growing feeling in the platinum and palladium market that the worst is over. After dropping to the lowest in at least half a decade in January, prices since rallied back into a bull market as the outlook for continued low U.S. interest rates reignited the appeal of precious metals. The two commodities will climb about 20 percent through the end of next year, partly on higher demand from carmakers, according to 12 traders and analysts surveyed by Bloomberg.
Berkshire Took Apple Stake Worth About $1 Billion in 1st Quarter (Bloomberg) Warren Buffett’s Berkshire Hathaway Inc. disclosed a stake in Apple Inc., betting that the technology company will rebound after a slump driven by a slowdown in iPhone sales. Berkshire held 9.81 million Apple shares as of March 31, according to a regulatory filing Monday from the billionaire’s Omaha, Nebraska-based company. The holding was valued at $1.07 billion at the end of the first quarter.
Wall Street’s Bond Forecasters Splinter as Fed Credibility Wanes (Bloomberg) To Thomas Costerg, the big question for bond investors isn’t whether the Federal Reserve will raise U.S. interest rates this year. It’s how long before the central bank is forced to cut them. As a senior economist at Standard Chartered Bank, Costerg says the risk of a recession will cause the Fed to backtrack on its move to end seven years of near-zero rates. That will underpin demand for Treasuries and push benchmark 10-year yields to 1.6 percent, one of the lowest forecasts in Bloomberg’s latest survey.

Overnight markets

Overview: US 10yr note futures are down -0.1909% at 130-23, S&P 500 futures are up 0.01% at 2043.75, Crude oil futures are up 2.06% at $47.16, Gold futures are up 1.27% at $1288.8, DXY is down -0.17% at 94.445.

US Economic Data

8:30 AM: Empire Manufacturing, May, -9.02, est. 6.50 (prior 9.56)
10: 00 AM: NAHB Housing Market Index, May, est. 59 (prior 58)

Canadian Economic Data

9:00 AM: Existing Home Sales, m/m, April, (prior 1.5%)

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

13/05/2016

par admin | Mai 13, 2016 | commentaires

Market update

US tsys higher, yields ~2bps lower, 10Y 1.727 (-2.3bps) on good volume in TY1 futures as European stocks decline, gold higher, USD index new highs, crude 1.1% lower @ 46.20. Tsys rose thru overnite session supported by weak stocks & crude. Asian stocks fell, Nikkei down 1.4%. Core Euro bonds higher& flatter led by 3bp rally in long UK gilts. German April CPI came in at 0.3% unrevised while a measure of ECB excess liquidity rose slightly to E833bln. GOCs higher in line with tsys, provi spds unch after closing yest 2bps tighter despite issuance from Newf & BCMFA. Crombie Reit (BBBL) announced a $418mln transaction to acquire a portfolio of properties from Sobeys.

News headlines

Stocks Give Up Week’s Gains as Commodities Fall; Yen, Bonds Rise (Bloomberg) The world’s financial markets just can’t shake off a sense of gloom. The MSCI All-Country World Index gave up all its gains for the week on Friday and emerging-market equities headed for a fourth-straight weekly loss as flagging corporate earnings eroded investor confidence. Oil retreated from a six-month high and iron ore fell to a two-month low. Even Germany’s strongest growth in two years wasn’t sufficient to boost the euro, while Treasuries rose with the yen on haven demand and the dollar strengthened against 14 of its 16 major peers.
Nerves dominate before U.S. retail numbers (Reuters) The dollar was set for a second week of gains on Friday while stock markets fell ahead of a handful of major U.S. and Chinese data releases which may do little to settle growing nerves over the outlook for the world’s two biggest economies. A poor performance on Wall Street on Thursday, driven by another big drop in Apple shares, seeped into Asian and European markets, down around half a percent across the board.
Euro-Area Growth Revised Down Slightly Despite Germany (Bloomberg) The euro-area economy grew slightly less than initially estimated in the first quarter, though momentum was still the fastest in a year. Led by a better-than-forecast performance by Germany, its largest economy, the euro region expanded 0.5 percent in the three months through March. That compares with an initial estimate of 0.6 percent. From a year ago, it grew 1.5 percent.
Oil falls as dollar strengthens but traders eye Nigerian outages (Reuters) Oil prices ended a three-day bull run on Friday, falling as a strong dollar weighed and investors cashed in on recent gains, though losses were cushioned by outages in Nigeria that have slashed output there to the lowest in 22 years. The dollar .DXY hit a two-week high against a basket of currencies, lifted by expectations the U.S. Federal Reserve will raise rates again before any other major central bank.
OPEC’s Stable Market Outlook Gives Few Drivers for Policy Change (Bloomberg) OPEC kept forecasts for global oil supply and demand unchanged in its last monthly assessment before members meet to review the market. The 13 nations of the Organization of Petroleum Exporting Countries pumped 32.44 million barrels a day in April, slightly less than will be required in the the third quarter. Production rose as gains in Iran and Iraq compensated for losses in Nigeria and Kuwait. Investment by the global oil industry through 2018 will slump to less than half the amount spent from 2012 to 2014 following the collapse in prices, OPEC said.
Hong Kong’s first-quarter GDP contracts on weak exports, spending (Reuters) Hong Kong’s economy shrank in the first quarter from the final quarter of 2015, hit by falling exports and weak consumer spending, with the risk that momentum will slow further. On the doorstep of the world’s second-largest economy, Hong Kong has been buffeted by China’s slowdown. A slump in visitors from the mainland, weak retail sales and falling asset prices have combined to put the economy on the verge of recession.
Warning of downward spiral, IMF sees no economic upside to Brexit (Reuters) International Monetary Fund chief Christine Lagarde said on Friday there were no economic positives to Britain leaving the European Union and that the impact would range from « pretty bad to very, very bad ». Her blunt warning came as the IMF said the country risks falling into a spiral of weaker economic growth, lower house prices and diminished foreign investment if voters opt to leave the European Union after the referendum next month.

Overnight markets

Overview: US 10yr note futures are up 0.0479% at 130-21, S&P 500 futures are down -0.09% at 2057, Crude oil futures are down -0.96% at $46.25, Gold futures are down -0.35% at $1266.7, DXY is up 0.48% at 94.604.

US Economic Data

8:30 AM: Retail Sales Advance, m/m, April, 1.3%,est. 0.8% (prior -0.3%)
- Retail Sales Ex Auto, m/m, April, 0.8% ,est. 0.5% (prior 0.2%)
- PPI Final Demand, m/m, April, 0.2%,est. 0.3% (prior -0.1%)
- PPI Final Demand Ex Food and Energy, m/m, April, 0.1%, est. 0.1% (prior -0.1%)
10:00 AM: Business Inventories, March, est. 0.2% (prior -0.1%)
- University of Michigan Consumer Sentiment, May P, est. 89.5 (prior 89.0)

Canadian Economic Data

There is no major economic news 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

12/05/2016

par admin | Mai 12, 2016 | commentaires

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