Commentaires matinaux

Market Update

US  tsys  trading higher on heavy volume in TY futures (610k), 10Y  1.795% (-2.5bps). Risk off move linked to deaths tied to Coronavirus in China, US equity futures lower with S&P -10.25, thou crude and gold are lower.  European bonds mostly lower led by 10Y gilts ~ UK employment came in above exp (208k vs 110k exp) with AHE 3.2% vs 3.1% exp). GOCs higher, lagging the move in tsys by 1bp in 10s. Nov Manufacturing Sales weaker than exp (-0.6% vs -0.5%) with Oct revised lower. Dec CPI and BOC rate decision tomorrow.

News headlines

U.S. Futures Slip as Europe Stocks Trim Decline: Markets Wrap (Bloomberg) U.S. equity futures slipped on Tuesday, pointing to declines after the long weekend as investors grapple with worries about a deadly virus in China that sparked earlier declines across Asia and Europe. Treasuries rose.

TSX falls on China virus worries, weaker oil prices (Reuters) Futures for Canada’s main stock index were lower on Tuesday, as rising worries about a new virus in China prompted a flight to safe-haven assets and oil prices fell on easing supply concerns.

Oil Slides as Ample Supplies Soften Shock of Libya Disruption (Bloomberg) Oil fell as global markets remained comfortably supplied despite the suspension of exports from Libya, and as equities faltered on political and economic worries in Asia.

Trump takes credit for economic boom ahead of impeachment trial (BNN) President Donald Trump boasted about his handling of the U.S. economy in a speech to business and political leaders in Davos, hours before his impeachment trial was set to begin in Washington.

China virus sends shiver through markets as risks mount (Reuters) Global shares took a beating on Tuesday, wiping out all gains made at the start of the week as mounting concerns about a new strain of coronavirus in China sent a ripple of risk aversion through markets.

Mnuchin says Phase 2 trade deal may not remove all tariffs: WSJ (Reuters) The Phase 2 trade deal with China would not necessarily be a “big bang” that removes all existing tariffs, U.S. Treasury Secretary Steven Mnuchin told the Wall Street Journal in an interview.

BOJ raises growth forecast, signals status quo on policy outlook (Reuters) The Bank of Japan nudged up its economic growth forecasts on Tuesday and was cautiously optimistic about the global outlook, though it said ongoing risks meant it was far to soon to consider scaling down its massive stimulus program.

China virus sends chill through markets as risks rise (Reuters) Global stock markets took a hit on Tuesday as mounting concern about a new strain of coronavirus in China sent a ripple of risk aversion through markets.

Market Overview: US 10yr note futures are up 0.242% at 129-12, S&P 500 futures are down -0.29% at 3315.25, Crude oil futures are down -1.47% at $57.68, Gold futures are down -0.36% at $1554.7, DXY is down -0.16% at 97.45, CAD/USD is up 0.09% at 0.7657.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.64%	2 Year	1.543%
5 Year	1.565%	5 Year	1.596%
10 Year	1.552%	10 Year	1.795%
30 Year	1.669%	30 Year	2.257%

US Economic Data

There is no US economic data for today

Canadian Economic Data

08:30 AM

Manufacturing Sales MoM, Nov  Survey: -0.50% Actual : -0.60%  Prior: -0.70%

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 mixed, short end higher while the long end steepened around the 10Y (1.825% + 1.5bps), late yesterday the US treasury announced it will issue a new 20Y bond in the first half of the year. Prices of the best levels after  Dec Housing Starts jumped to 1608k or 16.9% m/m vs 1.1% exp. US equity futures higher, S&P +7.75, Nasdaq +34, while crude is up for a second day 58.80.  Disappointing UK Retail Sales supporting gilts, which have rallied led by the short end , and in the wake of weak Dec CPI and dovish BOE comments. German bunds mixed, focus shifts to ECB meeting next week.  GOCs unch, 10Y 1.55%. Yesterday Cdn Western Bank issued $300mln 5Y dep notes @ 104 also way oversubscribed

News headlines

U.S. Futures Rise With Stocks; Dollar Edges Higher: Markets Wrap (Bloomberg) U.S. equity futures ground higher on Friday alongside stocks globally as a solid start to the American earnings season, easing trade tensions and mostly promising economic data all combined to prop up sentiment. The dollar edged upward.

CANADA STOCKS-TSX futures rise on promising China data (Reuters) Futures for Canada’s main stock index rose on Friday after Chinese data suggested that the world’s second-biggest economy was stabilizing.

Oil Near $59 as Trade Deal Hopes Jostle With Ample Supply (Bloomberg) Oil was near $59 a barrel in New York after rising the most in almost two weeks as the U.S. and China signed a trade agreement, though remains capped by signs that supplies remain plentiful.

The yield curve’s still weird. Fed’s Bullard is okay with that (Reuters) It was more than a year ago when St. Louis Federal Reserve bank President James Bullard started raising the alarm about a U.S. bond market where interest rates seemed to show investors losing faith in the economy, a risky environment for the Fed to carry out planned rate increases.

China posts weakest growth in 29 years as trade war bites, but ends 2019 on better note (Reuters) China’s economic growth cooled to its weakest in nearly 30 years in 2019 amid a bruising trade war with the United States, and more stimulus is expected this year as Beijing tries to boost sluggish investment and demand.

UK consumers cut back on spending again, adding to economic gloom (Reuters) British consumers failed to increase their spending for a record fifth month in a row in December, adding to signs of economic weakening that might prompt the Bank of England to cut interest rates this month.

Frustrated Lebanese depositors turn rage on crisis-hit banks (Reuters) As cash runs short at Lebanon’s banks, so has the patience of depositors. Hit by restrictions on withdrawals, some are taking extreme steps, occupying branches and in one case taking an employee hostage, to squeeze what they can from their accounts.

China’s economy grew 6% in fourth quarter as demand stabilized (BNN) China’s economy stabilized last quarter after slowing to the weakest pace in almost three decades, with the first acceleration in investment since June signaling that a firmer recovery could be underway.

World shares gain as China data fuels bets on growth (Reuters) World shares rose to record highs on Friday, buoyed by Chinese growth figures that suggested the world’s second-biggest economy was stabilizing.

Market Overview: US 10yr note futures are up 0.036% at 129-07, S&P 500 futures are up 0.24% at 3324.5, Crude oil futures are up 0.29% at $58.69, Gold futures are up 0.58% at $1559.5, DXY is up 0.15% at 97.463, CAD/USD is up 0.07% at 0.7663.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.644%	2 Year	1.551%
5 Year	1.569%	5 Year	1.613%
10 Year	1.556%	10 Year	1.815%
30 Year	1.687%	30 Year	2.276%

US Economic Data

08:30 AM	Housing Starts, Dec 1608K  Survey: 1380k  Prior: 1365k
	Housing Starts MoM, Dec 16.9% Survey: 1.10%  Prior: 3.20%
	Building Permits, Dec 1416K  Survey: 1460k  Prior: 1482k
	Building Permits MoM, Dec -3.9% Survey: -1.50%  Prior: 1.40%
09:15 AM	Industrial Production MoM, Dec  Survey: -0.20%  Prior: 1.10%
	Capacity Utilization, Dec  Survey: 77.00%  Prior: 77.30%
10:00 AM	U. of Mich. Sentiment, Jan P  Survey: 99.3  Prior: 99.3
	JOLTS Job Openings, Nov  Survey: 7250 Prior: 7267

Canadian Economic Data

08:30 AM

Int’l Securities Transactions, Nov -1.75b Survey: —  Prior: 11.32b

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 on below avg volume (300k TY futures), 10Y 1.77%.  Phili Fed Survey and Dec Retail Sales coming up, along with NAHB survey and Long-term TICS flows this aft.  Core EGBs higher, 10Y gilts/bunds 2bps lower while 2Y gilt yields have collapsed 20bps just this week with market pricing in a cut at this month’s BOE meeting. US equity futures higher – S&P/Nasdaq +0.40%, crude unch. Morgan Stanley +3.5% pre-mkt after huge Q4 eps beat $1.30 vs $0.99. GOCs lagging tsys by 1.5bps in the long end, ADP payrolls due at 8:30. Yesterday BMO was first out of the gate issuing $1.5bln in 5Y bail-in debt at 82, 3x oversubscribed.

News headlines

Futures near record on trade deal, robust earnings (Reuters) U.S. stock index futures hovered near all-time highs on Thursday on optimism over an initial U.S.-China trade deal and a positive start to the fourth-quarter earnings season.

Investors see smoother path for U.S. stocks as Warren’s election odds slip (Reuters) Traders are less worried about political uncertainty in the run-up to the U.S. presidential election, with former Vice President Joe Biden remaining strong in the polls while Senator Elizabeth Warren has lost ground.

ECB takes more upbeat view in December meetings: accounts (Reuters) European Central Bank policymakers took a more upbeat view on economic developments in their December 12 meeting but continued to see an abundance of risk that warrant ultra-easy policies, the accounts of the meeting showed on Thursday.

EU says will assess if US-China deal meets global trade rules (FP) The European Union’s trade chief said on Thursday that the bloc would check to see if a major trade deal struck by the United States and China is compliant with global rules.

China says trade deal good for all, media discourages ‘nitpicking’ (Reuters) Chinese state media on Thursday warned against any “nitpicking” as Beijing portrayed the Phase 1 trade deal with United States and its new commitments to massive purchases of American goods as a boon for China’s economy.

Trade deal no panacea for rocky U.S. relations with China (Reuters) From Huawei to the South China Sea, deep political rifts between Beijing and Washington are set to persist, despite a trade relations breakthrough, as the United States pushes back against an increasingly powerful and assertive China.

TSX futures climb as U.S.- China sign trade deal (Reuters) Canada’s main stock index futures rose on Thursday as the U.S. and China signed their Phase 1 trade deal, relieving market jitters after the 18-month trade conflict.

BNY Mellon profit surges 67% on one-time gain (Reuters) Bank of New York Mellon Corp (BK.N), the world’s largest custodian bank, reported a 67% jump in quarterly profit on Thursday, helped by a one-time gain from the sale of an unspecified equity investment.

Morgan Stanley beats profit estimates as bond trading revenue surges (Reuters) Morgan Stanley (MS.N) beat estimates for quarterly profit by a wide margin on Thursday, powered by strength in its investment management, bond trading and underwriting businesses.

Bombardier slashes forecast as it looks to accelerate debt payments (BNNBloomberg) Bombardier Inc. is cutting its full-year revenue and profit forecasts and is hunting for ways to accelerate debt repayments, the company said Thursday.

The Montreal-based plane and train maker expects its revenue for 2019 to come in at US$15.8 billion, down from previous forecast of as much as US$17 billion. It also now sees its adjusted earnings before interest and taxes coming in at US$400 million, down from its previous outlook of US$700 million and US$800 million.

Market Overview: US 10yr note futures are up 0.072% at 129-14, S&P 500 futures are up 0.29% at 3303.25, Crude oil futures are down -0.17% at $57.71, Gold futures are up 0.15% at $1556.4, DXY is down -0.11% at 97.121, CAD/USD is down -0.01% at 0.7669.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.635%	2 Year	1.552%
5 Year	1.551%	5 Year	1.59%
10 Year	1.537%	10 Year	1.774%
30 Year	1.661%	30 Year	2.228%

US Economic Data

08:30 AM	Philadelphia Fed Business Outlook, Jan  Survey: 380.00%  Prior: 30.00%
	Import Price Index MoM, Dec  Survey: 0.30%  Prior: 0.20%
	Import Price Index ex Petroleum MoM, Dec  Survey: 0.10%  Prior: 0.20%
	Import Price Index YoY, Dec  Survey: 0.50%  Prior: -1.30%
	Export Price Index MoM, Dec  Survey: 0.20%  Prior: 0.20%
	Export Price Index YoY, Dec  Survey: —  Prior: -1.30%
	Retail Sales Advance MoM, Dec  Survey: 0.30%  Prior: 0.20%
	Retail Sales Ex Auto MoM, Dec  Survey: 0.50%  Prior: 0.10%
	Retail Sales Ex Auto and Gas, Dec  Survey: 0.40%  Prior: 0.00%
	Retail Sales Control Group, Dec  Survey: 0.40%  Prior: 0.10%
	Initial Jobless Claims, 40544  Survey: 218k  Prior: 214k
	Continuing Claims, 37987  Survey: 1750k  Prior: 1803k
09:45 AM	Bloomberg Consumer Comfort, Survey: —  Prior: 65.1
10:00 AM	Business Inventories, Nov  Survey: -0.20%  Prior: 0.20%
	NAHB Housing Market Index, Jan  Survey: 74  Prior: 76
04:00 PM	Net Long-term TIC Flows, Nov  Survey: —  Prior: $32.5b
	Total Net TIC Flows, Nov  Survey: —  Prior: -$48.3b

Canadian Economic Data

08:30 AM

ADP Releases Payroll Data

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