Commentaires matinaux

Market Update

US tsys higher, yields 1.5-2.0 bps lower, 10Y 2.665% (-1.8bps),  US Q4 GDP expected at 2.2%  vs 3.4%  in Q3, forecasts were adjusted lower after a 1.2% plunge in Dec retail sales, the sharpest one month decline  since Sep 2009. A few Fed speakers today including Clarida saying the data has surprised to the downside somewhat since Dec. Fed chair Powell’s testimony yest reaffirmed patient stance, saying there are crosscurrents buffeting US economy.  GOCs higher, 10Y 1.90%,  in line with tsys, provis unch with rumours of QC 10Y supply.

News headlines

Stocks Fall After China Data Slip, Korea No-Deal: Markets Wrap (Bloomberg) Stocks dropped as disappointing manufacturing data out of China and an abrupt end to the U.S.-North Korea summit added to a litany of concerns facing investors. Havens, including gold and the yen, climbed.

Canada’s Trudeau disputes ex-minister’s charge she was pressured on SNC-Lavalin (Reuters) Canadian Prime Minister Justin Trudeau, rejecting an opposition call for his resignation, disputed allegations on Wednesday by his former justice minister that government officials inappropriately pressured her to help a major company avoid a corruption trial.

Consumers, weak exports seen curbing U.S. fourth-quarter growth (Reuters) The U.S. economy probably slowed in the fourth quarter, held back by softer consumer spending and weak exports, which could leave 2018 growth just shy of the Trump administration’s 3 percent annual target.

Alberta on track for $6.9B deficit, as oil sands power budget (BNN) A relentless increase in production from Alberta’s oil sands and higher crude prices in the first half of the year are powering the province’s budget through a pipeline shortage that has weighed on economic growth.

Canada’s inflation rate falls to 15-month lows on lower gas prices (BNN) Canada’s annual inflation fell in January to its lowest rate in 15 months as gasoline prices declined, giving the Bank of Canada plenty of breathing room on interest rates.

Canada stock futures dip as U.S.-North Korea summit ends with no deal (Reuters) Futures pointed to a lower opening for Canada’s main stock index on Thursday as U.S. President Donald Trump walked away from a nuclear deal at a summit with North Korea.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.762%	2 Year	2.48%
5 Year	1.785%	5 Year	2.46%
10 Year	1.896%	10 Year	2.664%
30 Year	2.143%	30 Year	3.05%

Canadian Economic Data

8:30 AM	Current Account Balance, 4Q Surv -$13.25b Prior -$10.34b
	Industrial Product Price MoM, Jan Surv 0.1% Prior -0.7%
	Raw Materials Price Index MoM, Jan Prior 3.8%

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 trading slightly higher ahead of Fed chair Powell 2nd day of testimony before the US House,  10Y 2.63%, avg volume in TY futures. SPX futures lower, USD index off the lows.  Crude 2% higher 56.65 after Saudis said OPEC will stick to production cuts despite pressure from trump. Core EGBs mixed, UK gilt yields higher for 3rd day, 10Y 1.21% , German 10Y bund yields ~1bp lower. GOCs unch before Jan CPI (1.4% exp vs 2.0% Dec).  The strong Dec reading  was largely driven by a 22% jump in airfares, while retail gas prices were 3% lower m/m in Jan.   The BOC auctions $3.0bln in 2Y bonds at noon – reopening of the 1.75% May 21 issue with the M21/2Y roll 0.6/0.4.

News headlines

Impact of India-Pakistan tensions spreads from Asia to Europe (Reuters) Global stocks traded lower on Wednesday after fresh hostilities between India and Pakistan led Asian assets to slip and investors sought “safe havens” such as the yen and Swiss franc.

Stocks Drop on Earnings, India; Pound Strengthens: Markets Wrap (Bloomberg) U.S. equity futures fell and stocks dropped in Europe as headwinds emerged from disappointing corporate earnings to geopolitical tension in Asia. The dollar and Treasuries were steady as traders await the second half of Federal Reserve Chairman Jerome Powell’s testimony to Congress.

Futures dip as Trump-Kim summit starts, India-Pakistan tensions flare (Reuters) U.S. stock index futures edged lower on Wednesday, mirroring global markets, as the second U.S.-North Korean nuclear summit kicked off and fresh hostilities erupted between nuclear-armed neighbors India and Pakistan.

U.S.-China trade: tariff and non-tariff barriers (Reuters) U.S. President Donald Trump said this week he may soon sign a deal with Chinese President Xi Jinping to end a trade war blamed for slowing global economic growth and disrupting markets.

WTO agrees terms to keep Britain in procurement deal post-Brexit (Reuters) Britain has agreement at the World Trade Organization to remain within the WTO’s Government Procurement Agreement after it leaves the European Union, Britain’s mission said.

TSX futures drop on global cues (Reuters) Futures for Canada’s main stock index fell on Wednesday, tracking a drop in global markets.

Powell says Fed in no rush to make judgment on policy changes (BNN) Federal Reserve Chairman Jerome Powell said a healthy U.S. economy has faced some “crosscurrents and conflicting signals” that officials in January decided warranted taking a patient approach to future interest-rate changes.

Oil Climbs as Saudis Stick to Supply Cuts Despite Trump Pressure (Bloomberg) Oil climbed in New York as Saudi Arabia signaled that OPEC and its allies will keep going with production cuts despite pressure from U.S. President Donald Trump to moderate prices.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.755%	2 Year	2.474%
5 Year	1.765%	5 Year	2.438%
10 Year	1.862%	10 Year	2.632%
30 Year	2.118%	30 Year	3.009%

Canadian Economic Data

8:30 AM	CPI NSA MoM, Jan Surv 0.1% Actual 0.1% Prior -0.1%
	CPI YoY, Jan Surv 1.4% Actual 1.4% Prior 2.0%
	Consumer Price Index, Jan Surv 133.6 Actual 133.6 Prior 133.4

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 trading higher, 10Y 2.64%(-2bps), after US Dec Housing Starts fell to a two-year low (-11.2% m/m vs -0.1% exp.) and as German bunds reverse earlier declines. Fed Chairman Powell speaks before US Congress at 10:00am. UK Gilts lagging, 10Y bund/gilt spd 3bps wider, as PM May said she does not want to extend Brexit talks, prepared to leave with no-deal Brexit. GOCs higher, outperforming tsys by 0.5bps in 10s, the 10Y 1.87%.  Jan CPI tomorrow (1.4% exp vs 2.0% in Dec) – gas prices ~15% lower than a year ago likely big factor. Provis unch,  more supply expected , latent demand for spread product with corp new issuance running ~20% lower than yr ago.

News headlines

Stocks Slide as Trade Optimism Wanes; Pound Jumps: Markets Wrap (Bloomberg) Global stocks dropped on Tuesday as the rush of optimism over U.S.-China trade talks from earlier in the week faded. The pound rallied as U.K. Prime Minister Theresa May promised a vote to delay Brexit if her proposed deal fails.

Pound leaps on Brexit hopes, shares take a breather (Reuters) World shares took a breather on Tuesday having scaled a five-month high, while Britain’s pound charged to a one-month top on renewed speculation that UK Prime Minister Theresa May was being bundled towards delaying Brexit.

Trump says ‘signing summit’ with Xi for U.S.-China deal possible soon (Reuters) U.S. President Donald Trump said on Monday he may soon sign a deal to end a trade war with Chinese President Xi Jinping if their countries can bridge remaining differences, saying negotiators were “very, very close” to a deal.

Bank of England likely to help economy after no-deal Brexit: Carney (Reuters) Bank of England Governor Mark Carney said on Tuesday the BoE would probably give more support to the economy if it suffers the shock of a no-deal Brexit, but that the options available to the British central bank would be limited.

‘Loser’ vs ‘Anemic’: Barrick’s Newmont bid starts on toxic note (Reuters) Long-time rivals Barrick Gold Corp and Newmont Mining Corp renewed their animosity on Monday with their chief executives trading insults after Barrick launched an $18 billion hostile bid for the U.S. company, presaging an aggressive battle.

Oil Steady After Biggest Loss in a Month as Trump Presses OPEC (Bloomberg) Oil steadied after falling the most in almost a month on Monday, when President Donald Trump called on OPEC to temper prices.

Powell to Duck Taking Sides as Two Fed Camps Square Off on Rates (Bloomberg) Federal Reserve Chairman Jerome Powell will probably gloss over an emerging division among policy makers about what it will take for them to resume raising interest rates when he speaks to lawmakers on Tuesday.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.777%	2 Year	2.494%
5 Year	1.793%	5 Year	2.464%
10 Year	1.887%	10 Year	2.655%
30 Year	2.138%	30 Year	3.025%

US Economic Data

8:30 AM	Housing Starts, Dec Surv 1256k Prior 1256k
	Building Permits, Dec Surv 1290k Prior 1328k
	Housing Starts MoM, Dec Surv -0.1% Prior 3.2%
	Building Permits MoM, Dec Surv -2.6% Prior 5.0%
9:00 AM	FHFA House Price Index MoM, Dec Surv 0.4% Prior 0.4%
	S&P CoreLogic CS 20-City YoY NSA, Dec Surv 4.5% Prior 4.68%
	S&P CoreLogic CS 20-City NSA Index, Dec Prior 213.66
10:00 AM	Richmond Fed Manufact. Index, Feb Surv 5 Prior -2
	Conf. Board Consumer Confidence, Feb Surv 124.9 Prior 120.2

Canadian Economic Data

There is no Canadian economic data for today.

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