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Market Update

US tsys lower, yields 2-2.5bps higher, 10Y 2.735%, above avg volume in TY futures (470k). German bunds lower as well, 10Y bund 0.20%.  European stocks at the highest in five months, Euro Stoxx third straight weekly gain  despite weaker  Feb Eurozone PMI (62 vs 52.6 in Jan).  US Equity futures higher, S&P +17, Nasdaq +51 –  Ebay +3.4% announcing a strategic review, GAP +5% as it looks to spin off Old Navy. Focus on ISM Man., PCE & U. Michigan sentiment. GOCs lower before Q4 GDP – expected at 1.0% vs 2.0% Q3.

News headlines

Stocks Climb as China Lifts Spirits; Dollar Gains: Markets Wrap (Bloomberg) Stocks are ending the week on a positive note as the latest economic data from China offers reassurance to investors concerned about the global growth outlook, while prospects of a trade deal improved. Treasuries extended a decline and the dollar pushed higher for a third day.

Wall Street futures bounce as focus shifts to inflation, factory data (Reuters) U.S. stock index futures bounced on Friday, setting up Wall Street’s main indexes for gains at the open, with investors waiting for data on inflation and manufacturing activity.

Deepening downdraft chills factory activity (Reuters) Factories across the globe slammed on the brakes last month as demand crashed, hit by the ongoing U.S.-China trade war, slowing global growth and political uncertainty in Europe ahead of Britain’s imminent departure from the EU.

Euro zone’s triple-A bond drought persists after ECB steps away (Reuters) High-grade euro zone debt remains scarce even though the European Central Bank has stopped its huge purchases of new bonds, intensifying concerns that banks will face future collateral shortages and highlighting the need for safe assets.

No deal blow for Moon’s vision of ‘peace-driven’ Korean economy (Reuters) As word spread that a summit between U.S. President Donald Trump and North Korean leader Kim Jong Un was ending early in failure, some South Korean officials at a Hanoi media center watching a live feed of proceedings turned pale and made hurried calls.

Canada seen approving extradition hearing against Huawei executive (Reuters) Canada is likely to announce on Friday that an extradition hearing against a Huawei Technologies Co Ltd executive can proceed, legal experts said, worsening already icy relations with Beijing.

Alberta eases oil output curtailment as prices rise, glut wanes (BNN) Alberta increased the amount of crude its letting producers pump for a second time after local oil prices surged and inventories continued to decline.

U.S. said to ready final China trade deal as hawks urge caution (BNN) U.S. officials are preparing a final trade deal that President Donald Trump and his Chinese counterpart Xi Jinping could sign in weeks, people familiar with the matter said, even as a debate continues in Washington over whether to push Beijing for more concessions.

Underlying Inflation Weakens as ECB Prepares for Crucial Meeting (Bloomberg) Underlying price pressures in the euro area remain weak, according to the latest inflation figures for the region, giving European Central Bank policy makers more to digest ahead of their crucial meeting next week.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.791%	2 Year	2.532%
5 Year	1.836%	5 Year	2.538%
10 Year	1.962%	10 Year	2.739%
30 Year	2.207%	30 Year	3.105%

US Economic Data

8:30 AM	Personal Income, Jan Surv 0.3%
	Personal Spending, Dec Surv -0.3% Prior 0.4%
	Real Personal Spending, Dec Surv -0.3% Prior 0.3%
	PCE Deflator YoY, Dec Surv 1.7% Prior 1.8%
	PCE Core MoM, Dec Surv 0.2% Prior 0.1%
	PCE Core YoY, Dec Surv 1.9% Prior 1.9%
9:45 AM	Markit US Manufacturing PMI, Feb F Surv 53.7 Prior 53.7
10:00 AM	ISM Manufacturing, Feb Surv 55.8 Prior 56.6
	ISM Prices Paid, Feb Surv 51.8 Prior 49.6
	U. of Mich. Sentiment, Feb F Surv 95.9 Prior 95.5

Canadian Economic Data

8:30 AM	Quarterly GDP Annualized, 4Q Surv 1.0% Actual 0.4% Prior 2.0%
	GDP MoM, Dec Surv 0.0% Actual -0.1%Prior -0.1%
	GDP YoY, Dec Surv 1.4% Actual 1.1% Prior 1.7%
	Markit Canada Manufacturing PMI, Feb Prior 53.0

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, 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