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24/03/2016

by admin | Mar 24, 2016 | comments

Us tsys slightly higher, curve flatter on light volume in tsy futures, US 10Y 1.87% (-1.2bps). European and Asian equities ~1.0% lower, the USD index is higher for a fifth day – the USD has now retraced ~75% of the post March 16th FOMC decline as Fed Bullard and others have warned in recent days that the next rate hike may not be far off. Core Euro bonds higher led by the long end on weakness in European stocks, lower crude as well as weaker German and French consumer confidence . GOCs higher after 8:30 US data (core durable goods -1.1% vs 0.3%). Provis opening wider on risk off, yest Newf issued both 5s & longs with both going well, rumours of Toronto 20Y muni deal.

News headlines

Global Stocks Extend Loss as U.S. Rate Speculation Lifts Dollar (Bloomberg) Stocks dropped around the world as the dollar extended gains into a fifth day, with the potential for higher U.S. interest rates again roiling financial markets as the Easter vacation looms. European shares have fallen every day this week, with raw-materials producers sliding as the Bloomberg Commodity Index declined. Crude slipped after data showed a bigger-than-expected increase in U.S. stockpiles, and iron ore fell for a third day, denting emerging markets.
Dollar rise hits commodities as Fed talks of tightening (Reuters) The dollar was on its best run in almost a year on Thursday, pressuring commodities and shares after yet another Federal Reserve official talked up the chance of more than one hike in U.S interest rates this year. If the dollar .DXY can keep its footing going into the long Easter weekend it will notch up a near 2 percent, and first weekly gain in a month against the world’s other major currencies.
Oil slides on mounting U.S. stockpiles, strong dollar (Reuters) Oil fell below $40 a barrel on Thursday, heading for the biggest weekly slide in two months, dented by record-high stockpiles in the United States and a stronger dollar. The U.S. government’s Energy Information Administration (EIA) said crude stockpiles climbed by 9.4 million barrels last week – three times the 3.1-million-barrel build forecast by analysts in a Reuters poll.
China stocks fall as state media reports resumption of short-selling (Reuters) March 24 China stocks fell on Thursday morning after state media reported that 35 domestic brokerages have resumed short-selling business after a long hiatus. The CSI300 index declined 1.0 percent to 3,204.16 points at the end of the morning session, while the Shanghai Composite Index lost 0.9 percent, to 2,982.48 points. Many Chinese financial institutions voluntarily halted margin lending and stock shorting activities during China’s mid-2015 stock market crash, in response to heavy pressure from Beijing.
Chinese Earnings Estimates Cut Most Among Major Asian Markets (Bloomberg) Chinese companies listed in Shanghai and Hong Kong had their profit estimates cut the most among major Asian economies as the slowest growth in more than two decades erodes corporate earnings. Projections for earnings of companies in the Shanghai Composite Index in the next 12 months were lowered by 6.8 percent, while those for firms in Hong Kong’s Hang Seng China Enterprises Index, or the H-share gauge, were reduced by 6.2 percent, according to data compiled by Bloomberg.
ECB Loans Banks 7.3 Billion Euros as New Long-Term Plan Readied (Bloomberg) The European Central Bank handed 7.3 billion euros ($8.2 billion) to euro-area banks in the seventh round of a program aimed at boosting lending to companies and consumers, shortly before it starts a new and more generous plan. The take-up in the targeted longer-term refinancing operation compares with 18.3 billion euros the ECB lent in a similar operation in December and 15.5 billion euros handed out in September. Banks have now taken a total of 426 billion euros since the first offer in 2014.
‘Brexit’ Outcome Depends on How the Don’t-Knows Vote, If At All (Bloomberg) Opinion polls are now in focus ahead of the U.K. referendum on the nation’s membership of the European Union, as investors search for clues on whether recent events helped undecided voters make their minds up if Britain should stay in or leave the Union. Developments that could have had some influence include the testimony by London Mayor Boris Johnson, who backs the U.K. leaving the EU, and Chancellor George Osborne, who supports ongoing membership. The resignation of minister Iain Duncan Smith, who supports the nation’s exit from the Union, and the bomb attacks in Brussels also are likely to have an impact on opinions.
Taiwan Cuts Benchmark Rate Again (WSJ) Taiwan’s central bank cut its benchmark interest rate for the second time in three months Thursday, opting to support the island’s recession-hit economy and take advantage of a relatively calm reaction in Asia to the Federal Reserve’s first rate increase in nearly a decade. The central bank lowered the benchmark discount rate to 1.625% from 1.750%. It also trimmed its other key rates for secured and unsecured loans by the same amount. The central bank last lowered rates in September, the first reduction in more than six years.

Overnight markets

Overview: US 10yr note futures are up 0.0725% at 129-14, S&P 500 futures are down -0.65% at 2015.5, Crude oil futures are down -2.61% at $38.75, Gold futures are down -0.07% at $1224.7, DXY is up 0.12% at 96.165.

US Economic Data

Initial Jobless Claims came in at a level of 265k, better than expected and up from prior month
Continuing Claims came in at a level of 2149k, better than expected and up down from prior month
Durable Goods Orders MoM variation was -2.8%, stronger than expected and down from prior month
Durable Goods Ex Transportation MoM variation was -1%, weaker than expected and down form prior month
Cap Goods Orders NonDef Ex Air MoM variation was -1.8%, weaker than expected and down form prior month
Cap Goods Ship Nondef Ex Air MoM variation was -1.1%, weaker than expected and up from prior month
Markit US Services PMI will be released at 9:45 AM
Markit US Composite PMI will be released at 9:45 AM
Kansas City Fed Manufacturing Activity will be released at 11:00 AM

Canadian Economic Data

Kansas City Fed Manufacturing Activity will be released at 11:00 AM

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

23/03/2016

by admin | Mar 23, 2016 | comments

Market update

Tsys trading in narrow range o/n, with better tone in European hours on uptick in bunds, US 10Y 1.93 (-1bp). GOCs opening unch, curve 1bp flatter. European stocks higher for a second day, the USD index is higher vs majors while commodities mostly lower and. Yesterday Cda/US narrowed 4bps as the safe haven bid in tsys quickly evaporated in N.A. hrs amid firmer stocks, stronger Phili Fed nonmfg, and hawkish comments from Fed Evans. The GOC curve flattened quickly post budget as increased issuance will impact the 2-5Y sector disproportionately. Gross bond issuance will increase by $41bln to $133bln (est 120-125bln), with increases along all sectors including an additional 10Y auction and a new 3Y. 2Y auction today will test demand for the sector post budget. Provis opening unch, Ont & QC poss today as well as a long muni rumoured.

News headlines

Europe recovers from Brussels-driven losses (Reuters) European stock markets bounced back on Wednesday from the concerns over security that have dominated the past 24 hours, helped by a handful of more positive signals on the health of the world’s major economies. Some Asian markets fell earlier in subdued trading as investors pulled back on positions ahead of the long Easter weekend, opting for caution following the suspected Islamic State suicide bomb attacks in Brussels.
Futures little changed day after Brussels attacks (Reuters) U.S. stock index futures were little changed on Wednesday as investors remained cautious a day after the attacks in Brussels and ahead of the Good Friday market holiday. Signs of improving business sentiment at the world’s major economies helped European markets recover, but Asian shares fell as investors backed away from risk.
Oil slips after U.S. stock build reasserts glut concerns (Reuters) Oil prices eased on Wednesday after figures from an industry group showed U.S. crude stockpiles rose last week by more than expected, reinforcing concerns that a global glut continues unabated. U.S. crude futures fell 33 cents to $41.12 a barrel by 0945 GMT. Prices struck a 2016 high of $41.90 in the previous session. The contract has rebounded more than 50 percent after hitting its lowest since 2003 in February.
OPEC, Russia oil output freeze deal may be ‘meaningless’: IEA (Reuters) A deal among some OPEC producers and Russia to freeze production is perhaps “meaningless” as Saudi Arabia is the only country with the ability to increase output, a senior executive from the International Energy Agency (IEA) said on Wednesday. Brent crude futures are up more than 50 percent from a 12-year low near $27 a barrel hit early this year, bouncing back after Russia and OPEC’s Saudi Arabia, Venezuela and Qatar struck an agreement last month to keep output at January levels.
German cabinet approves balanced budget plans up to 2020 (Reuters) The German cabinet on Wednesday approved financing plans that include increasing spending by more than 30 billion euros ($33.56 billion) up until 2020 while sticking to a balanced budget. An influx of 1.1 million migrants last year raised questions about whether Germany could cover the cost of accommodating and integrating the newcomers without jeopardizing its cherished balanced budget.
Trudeau Tackles Economy Head on With C$120 Billion in Deficits (Bloomberg) As an opposition lawmaker in Canada’s parliament seven years ago, Justin Trudeau criticized former Prime Minister Stephen Harper for making government “totally absent from the defining issues of our time.” In his first budget as prime minister released Tuesday, Trudeau put the federal government back at the center of the nation’s economy with almost C$120 billion ($92 billion) in accumulative deficits and the biggest jump in spending since the 2009 recession.
British ‘Out’ campaign takes 2 percentage point lead ahead of EU referendum – ICM poll (Reuters) The campaign for Britain to leave the European Union has taken a 2 percentage point lead, according to an ICM poll, indicating a dispute in the Conservative Party may have dented confidence in Prime Minister David Cameron’s push for the country to stay in. Support for Britain to leave the EU rose to 43 percent, up 2 percentage points from a similar poll a week ago and the highest proportion in favour of a British exit since ICM started its referendum tracker in May 2015.
Bank of Thailand Keeps Rates Unchanged at 1.5% (Bloomberg) Thailand’s central bank kept its key interest rate unchanged for a seventh straight meeting and said it stands ready to curb volatility in the baht as the country seeks to avoid a fourth straight year of export contraction. The Bank of Thailand held its one-day bond repurchase rate at 1.5 percent, with Monetary Policy Committee members voting unanimously in favor, it said on Wednesday.
In era of cheap oil, Saudi loses shine for foreign workers (Reuters) Mobarak Musa, a mobile telephone salesman from Syria, has spent 10 years working in Saudi Arabia, sending part of his wages back home to support his parents and three brothers. A shift in Saudi labor policy means he won’t be able to do so for much longer.

Overnight markets

Overview: US 10yr note futures are up 0.0243% at 128-27, S&P 500 futures are up 0.04% at 2043.25, Crude oil futures are down -0.63% at $41.19, Gold futures are down -1.44% at $1230.6, DXY is up 0.29% at 95.922.

US Economic Data

MBA Mortgage Applications variation was -3.3% from prior period.
New Home Sales will be released at 10:00 AM
New Home Sales MoM variation will be released at 10:00 AM

Canadian Economic Data

New Home Sales MoM variation will be released at 10:00 AM

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

22/03/2016

by admin | Mar 22, 2016 | comments

Market update

Tsys opening higher in safe haven buying after attacks in Brussels, US 10Y 1.90 (-2bps). European stocks are ~1.0% lower, euro off slightly, US stocks futures higher. Core Euro bonds higher in led by the long end, but bunds off the highs on better than expected March IFO. Latest JPM Tsy Client Survey showed all clients holding small long position from short last week. GOCs slightly higher in line with tsys, budget later today expected to reveal $30bln+ budget deficit this yr and deficits going forward. Provis 0.5-1bp wider this morning, Quebec & Ont possible today with risk appetite still fairly high.

News headlines

Stocks Drop on Brussels Attack as Gold Rises With Bonds and Yen (Bloomberg) European stocks fell, while German government bonds rose with gold and the yen after explosions rocked a Brussels airport departure hall and a downtown subway station. The Stoxx Europe 600 Index fell the most in a week as the attacks caused deaths and injuries and spurred fears of imminent follow-up attacks in the capital of the European Union. Travel and leisure shares led the slide and futures on the Standard & Poor’s 500 Index also declined. The yield on 10-year bunds touched the lowest in almost two weeks, while gold gained for the first time in four days as investors sought the safest assets. The pound dropped against all its major peers amid speculation the blasts may boost the case for Britain leaving the European Union.
Oil market rattled by deadly Brussels blasts (Reuters) Oil prices seesawed on Tuesday, rattled by investor nervousness after deadly blasts in Brussels prompted a flight towards so-called safe-haven assets such as gold.
Trudeau Will Push Canada Into the Red With `Unsexy’ Debut Budget (Bloomberg) Prime Minister Justin Trudeau will put the Canadian government back in business when he introduces a debut budget Tuesday that reverses a decade of restraint. Trudeau, whose popularity has swelled since his majority victory in October’s election, will push the country deeper into deficit as it grapples with sluggish economic growth. The shortfall will finance new benefits for families and what the Liberal prime minister bills as “unsexy” infrastructure spending, among other programs.
Libya won’t attend April oil meeting, wants to boost output: source (Reuters) OPEC member Libya does not plan to attend an April 17 oil producer meeting about freezing production to support prices because it wants to increase output when the situation allows, a Libyan OPEC delegate said.
Japan Land Prices Rise for the First Time Since 2007 on Tourism (Bloomberg) Japan’s land prices rose for the first time in eight years in 2015 after low mortgage rates encouraged home purchasing and a booming tourism market lifted values for retail space and hotels. Nationwide land prices on average gained 0.1 percent, compared with a 0.3 percent decline a year earlier, the Ministry of Land, Infrastructure and Transport said Tuesday.
German Manufacturing Grew at Slowest Pace in 16 Months in March (Bloomberg) German manufacturing grew at the slowest pace in 16 months in March, evidence that the economy is feeling the pressure of cooling global demand. Markit Economics said its Purchasing Managers Index slipped to 50.4 from 50.5 in February, just above the 50 level that separates expansion from contraction. While a separate report showed services improved this month, a gauge of new business across both sectors declined to the lowest in eight months.
Russia Deals Deepen India Hold in China Oil-Buying Backyard (Bloomberg) India is expanding its footprint in China’s backyard by forging deals with Russia for stakes in Siberian fields that supply Asia’s biggest economy and crude consumer. Deals last week between Rosneft and Indian state-run companies beefed up the South Asian nation’s share in two assets that are linked to the East Siberia-Pacific Ocean pipeline
French Economy Picks Up, Remains ‘Sluggish,’ Markit Says (Bloomberg) France’s economy showed signs of a limited pickup at the end of the first quarter as services expanded at the fastest pace in five months. Markit Economics said its services Purchasing Managers Index rose to 51.2 in March from 49.2 in February, moving back above the 50 level that separates expansion from contraction.
K. Inflation Rate Remains at 0.3%, Far Below BOE’s Target (Bloomberg) The U.K.’s inflation rate was unexpectedly unchanged in February, remaining far below the Bank of England’s 2 percent goal. Annual consumer-price growth was at 0.3 percent, the Office for National Statistics said in London on Tuesday. Economists had forecast an acceleration to 0.4 percent. Core inflation, which excludes volatile food and energy prices, held at 1.2 percent.

Overnight markets

Overview: US 10yr note futures are up 0.1211% at 129-6, S&P 500 futures are down -0.38% at 2035, Crude oil futures are down -0.63% at $41.26, Gold futures are up 0.88% at $1255.2, DXY is up 0.24% at 95.517.

US Economic Data