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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

Market Update

US tsys weaker, yields 1-2bps higher, 10Y 2.74% (+1.5bps), low volume in TY futures (250k). Core Euro bonds lower, bunds pressured by large futures block trade ~7:00am at 162.97 (EU 820k/bp), while Eurozone Jan Retail Sales came in above exp (2.2% vs 2.1%) . Italian BTPs higher on stronger than exp Feb services PMI.  US equity futures higher, S&P +2.75 having given up earlier gains. ISM non-manuf index for Feb and Dec New Home Sales focus for US data today.  GOCs lower in line with tsys, no data ahead of BOC decision tomorrow. GOCs well bid yesterday all day, extending outperformance after resignation from Trudeau cabinet. Can/US 3-9bps tighter over the week led by the short end, GOC curve close to recent steeps 2s30s 42bps.  Provis opening unch, Alberta 10Y deal  rumoured

News headlines

Stocks Drift, Dollar Climbs as Trade News Awaited: Markets Wrap (Bloomberg) Global stocks drifted on Tuesday as investors searched for fresh direction after China lowered its growth forecasts and as speculation endured that a Sino-American trade deal is near. Treasuries declined while the dollar strengthened for a fifth day.

Stock futures inch higher, progress in U.S.-China trade talks in focus (Reuters) U.S. stock futures ticked higher on Tuesday, a day after the Dow Jones Industrial Average and the S&P 500 posted their biggest drop in nearly a month, as investors hoped for an U.S.-China trade deal as early as this month.

Oil Steadies as Traders Weigh China Response to Slowing Growth (Bloomberg) Oil steadied, reversing earlier losses, as traders assessed Chinese measures to protect economic growth in the world’s second-biggest fuel user.

Second Canadian minister quits over scandal, Trudeau taking it ‘seriously’ (Reuters) In a serious blow to Canadian Prime Minister Justin Trudeau, a second member of his Cabinet resigned on Monday, saying she had lost confidence in how the government had dealt with an escalating political scandal.

Trump scraps trade privilege for India; Delhi plays down impact (Reuters) U.S. President Donald Trump looked set to open a new front in his trade wars on Monday with a plan to end preferential trade treatment for India that allows duty-free entry for up to $5.6 billion worth of its exports to the United States.

China to slash taxes, boost lending to prop up slowing economy (Reuters) China sought to shore up its slowing economy through billions of dollars in planned tax cuts and infrastructure spending, with economic growth at its weakest in almost 30 years due to softer domestic demand and a trade war with the United States.

Canadian dollar hits near three-week low ahead of Bank of Canada rate decision this week (The Globe And Mail) The Canadian dollar weakened to its lowest point in nearly three weeks against its U.S. counterpart on Monday, as the greenback climbed broadly and investors bet the Bank of Canada would leave interest rates unchanged later this week.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.755%	2 Year	2.553%
5 Year	1.776%	5 Year	2.546%
10 Year	1.906%	10 Year	2.737%
30 Year	2.177%	30 Year	3.1%

US Economic Data

9:45 AM	Markit US Services PMI, Feb F Surv 56.2 Prior 56.2
	Markit US Composite PMI, Feb F Prior 55.8
10:00 AM	ISM Non-Manufacturing Index, Feb Surv 57.4 Prior 56.7
	New Home Sales, Dec Surv 600k Prior 657k
	New Home Sales MoM, Dec Surv -8.7% Prior 16.9%
2:00 PM	Monthly Budget Statement, Jan Surv $10.0b Prior -$13.5b

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

Market Update

Tsys trading firmer, 10Y 2.75% (-0.5bps), modest volume in TY futures (275k).   Equity futures higher on trade optimism, S&P +0.70%. data calendar thin with only Dec Const Spending. China and US close to trade pact that could lift all US tariffs in return for China promises to increase US imports, deal with intellectual property rights. Trump went after Fed Powell again for his hawkish stance, also noting the USD was too strong. GOCs off the lows , in line with tsys, 10Y 1.93%. 407 in the mkt with $800mln long tens (2030) & longs.

News headlines

Stocks, U.S. Futures Climb on Trade-Deal Optimism: Markets Wrap (Bloomberg) Stocks advanced globally alongside U.S. equity futures after the U.S. and China were said to close in on a trade deal that may end American tariffs in return for Chinese concessions. The dollar edged higher with Treasuries, while commodities were mixed.

CANADA STOCKS-TSX futures up on trade deal optimism (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Monday on growing hopes that the United States and China will likely agree on a deal to end their eight-month-long trade war and eliminate tariffs levied against each other.

U.S., China said near deal that could end most U.S. tariffs (BNN) The U.S. and China are close to a trade deal that could lift most or all U.S. tariffs as long as Beijing follows through on pledges ranging from better protecting intellectual-property rights to buying a significant amount of American products, two people familiar with the discussions said.

Brexit bribe? UK PM May unveils $2.1 billion fund for Brexit-backing towns (Reuters) British Prime Minister Theresa May will on Monday set out plans for a 1.6 billion pound ($2.11 billion) fund to help to boost economic growth in Brexit-supporting communities with ministers denying it was a bribe to win support for her EU exit deal.

Oil Rises as U.S. China Trade Deal Nears While Supply Tightens (Bloomberg) Oil climbed as the U.S. and China were said to near a deal on trade that would underpin the outlook for crude demand, while supplies around the world showed signs of tightening.

Huawei CFO suing Canada over December arrest (Reuters) The lawyers for Huawei Chief Financial Officer Meng Wanzhou are suing the Canadian government, its border agency and federal police, alleging their client was detained, searched and interrogated for three hours in violation of her constitutional rights.

FOREX-Long dollar bets thrive in low volatility (Reuters) The dollar consolidated gains on Monday after posting its biggest monthly rise in four months, as low volatility prompted investors to buy the currency, particularly against the yen.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.76%	2 Year	2.561%
5 Year	1.798%	5 Year	2.558%
10 Year	1.928%	10 Year	2.751%
30 Year	2.196%	30 Year	3.117%

US Economic Data

10:00 AM

Construction Spending MoM, Dec Surv 0.1% Prior 0.8%

Canadian Economic Data

8:30 AM	MLI Leading Indicator MoM, Jan Prior -0.3%
10:00 AM	Bloomberg Nanos Confidence, Mar 1 Prior 54.4

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