Commentaires matinaux

Market Update

US tsys moving higher with equities lower (S&P -13), US 10Y 2.64% (-0.5bps) as weakness in global stocks continues with the Nikkei -2.05, 4th day down, CSI Comp -4.0%, Europe -1.0%.  GOCs continuing to outperform tsys in the global bond rally, Can/US at new narrows across the curve -88bps in 2s with   2Y yields now 15bps below the o/n rate.  US employment forecast to have risen 180k last month from 304k in Jan with the unemployment rate back below 4.0%.  Cdn emp growth also expected to have decelerated in Feb to 1.2k from 67k In Jan. BOC Deputy Patterson said Q4 growth slowdown was sharper than expected, while economic weakness will likely extend into the first half of the year.  Provi spds wider, yest Ont 29s 79.5/ from 77.5 at issue yest. CMB 5y next week.

News headlines

U.S. economy creates paltry 20,000 jobs in February (Reuters) U.S. job growth almost stalled in February, with the economy creating only 20,000 jobs amid a contraction in payrolls in construction and several other sectors, which could raise concerns about a sharp slowdown in economic activity.

Stock Slide Worsens on Growth Woes as Jobs Loom: Markets Wrap (Bloomberg) U.S. stock futures retreated alongside European equities amid renewed concerns about global growth after a plunge in Chinese stocks set the tone for global markets on Friday. The dollar slipped and Treasuries were steady ahead of American jobs data.

Bank of Canada sees longer economic ‘detour’ than expected (BNN) Canada’s economic slump may end up lasting longer than first thought amid surprising signs of weakness in household spending and investment, though policy makers still expect a rebound to take place, a central bank official said.

China February exports tumble the most in three years, spur fears of ‘trade recession’ (Reuters) China’s exports tumbled the most in three years in February while imports fell for a third straight month, pointing to a further slowdown in the economy and stirring talk of a “trade recession”, despite a spate of support measures.

Growth fears, China equity plunge haunts world stocks (Reuters) Deepening fears for the health of the global economy pushed world stocks to three week lows on Friday after China exports contracted by a fifth, sending shares in some of the country’s key indexes more than 4 percent lower.

Key Fed gauge flashes warning signal for second time this year (BNNBloomberg) A gauge of U.S. economic health closely watched by the Federal Reserve is flashing warning signs for the second time this year. The near-term forward spread, which reflects the difference between the forward rate implied by Treasury bills six quarters from now and the current three-month yield, fell back below zero on Friday for the first time since January. A negative reading shows the market expects monetary policy easing during the next 12 to 18 months.

ECB Officials Defend Stimulus as Move Needed to Arrest Slowdown (Bloomberg) Euro-area officials set out to defend their latest monetary-policy action, stressing their package of new long-term loans and revised guidance was an appropriate response to the region’s economic slowdown.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.599%	2 Year	2.467%
5 Year	1.604%	5 Year	2.432%
10 Year	1.737%	10 Year	2.634%
30 Year	2.048%	30 Year	3.023%

US Economic Data

8:30 AM	Housing Starts, Jan Surv 1195k Prior 1078k
	Building Permits, Jan Surv 1287k Prior 1326k
	Change in Nonfarm Payrolls, Feb Surv 180k  Prior 304k
	Change in Manufact. Payrolls, Feb Surv 12k Prior 13k
	Unemployment Rate, Feb Surv 3.9% Prior 4.0%
	Average Hourly Earnings MoM, Feb Surv 0.3% Prior 0.1%
	Average Hourly Earnings YoY, Surv 3.3% Prior 3.2%

Canadian Economic Data

8:15 AM	Housing Starts, Feb Surv 205.0k Actual 173.2k Prior 208.0k
8:30 AM	Net Change in Employment, Feb Surv 1.2k Prior 66.8k
Unemployment Rate, Feb Surv 5.8% Prior 5.8%
Capacity Utilization Rate, 4Q Surv 82.0% Prior 82.6%

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys higher, 10Y 2.68% (-2bps) prices at highs of overnite session after ECB decision, will leave rates on hold thru this year at least, announcement of new long-term lending operations. German bund yields 1-2bps lower, 10Y 0.10% closing in on Feb low (0.085%). GOCs higher, in line with tsys, Can/US reaching new narrows after BOC statement, short end of the GOC curve trading below o/n rate. Corp spreads under pressure as supply picks up –  Northwestern Hydro (Al) priced $1.1bln in 2036 & 2038 bonds, Daimler issued $300mln 5Y @ 130.2, and Fortified Trust (BMO)  issued 5Y ABS @89.

News headlines

ECB unleashes support package for economy threatened by slowdown (BNN) The European Central Bank said it will offer more cheap loans to banks and keep interest rates at record-lows for longer as a weakening economy derails its plan to withdraw stimulus.

Futures edge lower as investors await fresh triggers (Reuters) U.S. stock futures ticked lower on Thursday after three days of declines, as investors sought fresh reasons to buy following a strong run in stocks this year.

CANADA STOCKS-Futures edge higher on oil gains (Reuters) Futures pointed to a slightly higher opening for Canada’s main stock index on Thursday as ongoing OPEC-led supply cuts and U.S. sanctions against exporters Venezuela and Iran supported oil prices.

PM admits ‘erosion of trust’ between office, Wilson-Raybould over SNC (BNN) Prime Minister Justin Trudeau says there was an « erosion of trust » between his office and former justice minister Jody Wilson-Raybould over the SNC-Lavalin case.

U.S. Futures, Europe Stocks Edge Up on Dovish ECB: Markets Wrap (Bloomberg) U.S. futures and European stocks erased losses as the ECB took a dovish turn at its latest policy meeting, underscoring concerns over the global economy but raising hopes policy makers will move to support growth. The euro fell.

Loonie drops to two-month low after Bank of Canada changes tone (BNN)  The Canadian dollar tumbled to the weakest level since the opening days of 2019, and the nation’s government-bond yields sank, after the Bank of Canada dropped its assertion that interest rates need to rise amid signs of slowing economic growth.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.665%	2 Year	2.508%
5 Year	1.684%	5 Year	2.486%
10 Year	1.814%	10 Year	2.681%
30 Year	2.107%	30 Year	3.062%

US Economic Data

7:30 AM	Challenger Job Cuts YoY, Feb Actual 117.2% Prior 18.7%
8:30 AM	Initial Jobless Claims, Mar 2 Surv 225k Actual 223k Prior 225k
8:30 AM	Continuing Claims, Feb 23 Surv 1772k Actual 1755k Prior 1805k
Nonfarm Productivity, 4Q Surv 1.5% Actual 1.9% Prior 2.3%
9:45 AM	Bloomberg Consumer Comfort, Mar 3 Prior 61.0
3:00 PM	Consumer Credit,  Jan Surv $17.000b Prior $16.554b

Canadian Economic Data

8:30 AM

Building Permits MoM, Jan Surv -5.0% Actual -5.5% Prior 6.0%

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys higher, before ADP payrolls and Dec trade balance, 10Y 2.71% (-1bp). German bunds followed tsys higher in Asia as Aussie bonds surged on Q4 GDP miss (0.2% vs 0.3%). The OECD cuts its forecast for global growth this year for the second time, while warning that a no-deal Brexit would plunge the UK into recession with GDP falling below 1.0% for the first time in a decade. US equity futures lower, even as Chinese stocks rose for a 4th day to nine-month highs, crude -1.0% $56.  GOCs higher led by the 10Y @1.84% (-3bps), Can/US another 1-2bps tighter before BOC decision. Short end  yields trading at three month lows, 2Y 1.71% starting to price in rate cuts  with the o/n target rate is expected to remain at 1.75%.  Expect a dovish tilt to the statement, particularly after last week’s huge miss on Q4 GDP.

News headlines

Chinese stock surge fails to ignite broader markets rally (Reuters) Chinese shares surged to a nine-month high on Wednesday bolstered by hopes of more stimulus measures from Beijing, but the rally failed to fuel broader gains in global markets as investors waited for fresh central bank cues.

Stocks future subdued due to lack of fresh catalysts (Reuters) U.S. stock futures were subdued on Wednesday in the absence of fresh developments on trade, with investors taking a step back after a strong run in equities since the start of the year.

UK reaches ‘basic agreement’ on no-deal Brexit tariffs, tough choices remain (Reuters) Britain’s government has reached a general agreement on import tariffs if it leaves the European Union without a deal, trade minister Liam Fox said on Wednesday, but the business minister warned that tough choices remained.

CANADA STOCKS-TSX futures flat as investors await interest rate decision (Reuters) Stock futures pointed to a flat opening for Canada’s main stock index on Wednesday, ahead of the Bank of Canada’s interest rate decision.

Economic slump prompts rethink of Bank of Canada’s rate path (BNN) The Canadian economy’s sudden slowdown at the end of last year is set to keep the Bank of Canada from raising interest rates Wednesday, with investors looking for clues as to whether it pushes Governor Stephen Poloz off his hiking path altogether.

OECD cuts global outlook again and warns worse may be ahead (BNN) The global economy is suffering more than expected from trade tensions and political uncertainty which are clouding prospects particularly in Europe, according to a gloomy report from the OECD.

Oil Falls After Industry Report Shows Jump in Crude Stockpiles (Bloomberg) Oil declined after an industry report showed a massive increase in U.S. crude stockpiles, ahead of more comprehensive data from the government.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.715%	2 Year	2.539%
5 Year	1.729%	5 Year	2.518%
10 Year	1.848%	10 Year	2.706%
30 Year	2.135%	30 Year	3.075%

US Economic Data

7:00 AM	MBA Mortgage Applications, Mar 1 Actual -2.5% Prior 5.3%
8:15 AM	ADP Employment Change, Feb Surv 190k Actual 183k Prior 213k
8:30 AM	Trade Balance, Dec Surv -$57.9b Prior -$49.3b

Canadian Economic Data

8:30 AM	Int’l Merchandise Trade, Dec Surv -2.06b Prior -2.06b
	Labor Productivity QoQ, 4Q Surv -0.3% Prior 0.3%
10:00 AM	Bank of Canada Rate Decision, Mar 6 Surv 1.75% Prior 1.75%
	Ivey Purchasing Managers Index SA, Feb Prior 54.7

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230