Commentaires

23/03/2016

par admin | Mar 23, 2016 | commentaires

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

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

22/03/2016

par admin | Mar 22, 2016 | commentaires

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

FHFA House Price Index MoM variation will be released at 9:00 AM
Markit US Manufacturing PMI will be released at 9:45 AM
Richmond Fed Manufacturing Index will be released at 10:00 AM

Canadian Economic Data

Federal Budget will be released at 4:00 PM

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

21/03/2016

par admin | Mar 21, 2016 | commentaires

Market update

Tsys opening lower in quiet trading due to Japanese market holiday, US 10Y 1.89 (+1bp). Tsys pressured by higher Euro stocks even as crude is ~1.0% lower at $39.00. Latest CFTC COT report showed specs adding to shorts in the ultralong (new record short), slightly reducing longs in the 10Y and adding to longs in the 30Y bond. Core Euro bonds higher, bunds higher led by the 5Y. Dovish comments from a couple of ECB members Villeroy & Coeure led to a rally in bunds with Coeure nothing the ECb has other tools at its disposal to fight low inflation. GOCs are trading lower, spds ~1bp tighter vs tsys – last week GOCs cheapened 5-7 bps vs tsys in the wake of a surprisingly dovish FOMC. Provi spds unch, Ont 46 106/105, Ont 25s 93/92 – the 10/30 box has steepened 4bps since the peak in spds late Feb as 10s have led the charge. Munis have lagged the rally in provis to a great extent, York 25s still ~30 bps over Onts hasn’t budged in two months.

News headlines

Global Market Volatility Falls to Two-Month Low; Oil Pares Drop (Bloomberg) Volatility across global financial markets is at a two-month low as signs central banks will continue to support asset prices settles investor nerves that frayed at the start of the year. Stocks and bond markets were little changed on Monday after a measure of global stocks posted the strongest close since Jan. 1 last week following five weeks of gains. The Shanghai Composite Index topped 3,000 for the first time in two months amid plans to loosen margin-lending curbs, South Africa’s rand fell on political turmoil and gains in Indian bonds sent yields to the lowest since 2013 on a government decision to cut rates on small savings plans.
S&P 500 Futures Little Changed After Equities Erase 2016 Losses (Bloomberg) U.S. stock-index futures were little changed as investors assessed a rally that turned equities positive for the year. Standard & Poor’s 500 Index contracts expiring in June added less than 0.1 percent to 2,038.5 at 7:11 a.m. in New York. A slower pace of rate increases signaled by the Federal Reserve helped the benchmark climb for a fifth week, its longest winning streak since November. Dow Jones Industrial Average futures gained 12 points to 17,504.
Oil prices stabilize after falling on higher U.S. rig count (Reuters) Oil prices recovered from early losses on Monday as the market digested news of a modest rise in U.S. drilling activity, though uncertainty lingered over the outcome of a meeting of the world’s major exporters next month to discuss freezing output. U.S. energy firms last week added one oil rig after 12 weeks of cuts, according to data from industry firm Baker Hughes. Oil rigs have fallen by two-thirds over the past year to their lowest since 2009, and this surprise addition suggested the drop-off in crude drilling may be stabilizing after the oil price’s 50-percent rally since February.
Fed’s Lacker Confident Inflation Poised to Rebound to 2% Target (Bloomberg) Federal Reserve Bank of Richmond President Jeffrey Lacker said that inflation will rise back to the U.S. central bank’s 2 percent target once energy prices stabilize and the dollar stops advancing. “I am reasonably confident that, barring subsequent shocks, inflation will move back to the FOMC’s 2 percent objective over the medium term,” Lacker said in remarks prepared for a speech at the Banque de France in Paris Monday, referring to the policy-setting Federal Open Market Committee.
China says it will fend off financial risks, communicate better with markets (Reuters) China has many policy tools at its disposal to fend off financial risks and will improve its communication with markets, Premier Li Keqiang said on Monday. Li told the visiting International Monetary Fund Managing Director Christine Lagarde that China will not rely on yuan depreciation to spur exports.
Sterling hit by British political row, yen inches higher (Reuters) Sterling was the big loser among major currencies on Monday, sinking more than half a percent on concerns that a split in the ruling Conservative Party is deepening ahead of June’s referendum on EU membership. With stock markets mixed, the safe-haven yen inched higher against the dollar, euro and commodity-linked currencies like the Australian and New Zealand dollars. The dollar index, which measures the U.S. currency’s broad strength against a basket of its peers, was roughly steady at 95.102 after falling by more than 1 percent for the third week running last week.
Greek Bailout Tranche Deal Eludes as Refugee Challenge Grows (Bloomberg) Greece and its creditors ended the latest round of talks on Sunday without reaching an agreement on the terms attached to the country’s bailout, as Europe’s most-indebted state faces the challenge of handling the continent’s biggest-ever wave of irregular migration. Work will continue over the Easter break and bailout monitors will return to Athens on April 2 with a view to concluding negotiations as soon as possible, a European Commission spokeswoman said in an e-mail.
Exclusive: China central bank to Fed: A little help, please? (Reuters) Confronted with a plunge in its stock markets last year, China’s central bank swiftly reached out to the U.S. Federal Reserve, asking it to share its play book for dealing with Wall Street’s « Black Monday » crash of 1987. The request came in a July 27 email from a People’s Bank of China official with a subject line: « Your urgent assistance is greatly appreciated! » In a message to a senior Fed staffer, the PBOC’s New York-based chief representative for the Americas, Song Xiangyan, pointed to the day’s 8.5 percent drop in Chinese stocks and said « my Governor would like to draw from your good experience. »
Valeant Pharmaceuticals International Inc naysayers say company can be saved, but it’s going to take some major changes (FinancialPost) It’s not easy to be a naysayer. Only a handful of short-sellers and analysts were ringing alarm bells when Valeant Pharmaceuticals International Inc. was in the midst of its rise to the top of the TSX. They were largely ignored at first.

Overnight markets

Overview: US 10yr note futures are down -0.2173% at 129-4, S&P 500 futures are down -0.09% at 2035.75, Crude oil futures are up 0.23% at $39.53, Gold futures are down -0.76% at $1244.8, DXY is up 0.07% at 95.152.

US Economic Data

Chicago Fed Nat Activity Index was at a level of -0.29, missing the estimate and down from the previous period
Existing Home Sales will be relased at 10:00 AM
Existing Home Sales MoM variation will be released at 10:00 AM

Canadian Economic Data