Commentaires matinaux

Market Update

Tsys trading slightly higher, 10Y 2.63%, modest volume in TY futures (283k), with S&P futures -3.0 and the USD unch. FOMC minutes to be released at 2:00PM expected to discuss shift to a neutral bias at January meeting, as well as the likelihood of a pause in the rolloff of treasuries and MBS on the Fed’s balance sheet. GOCs higher, in line with tsys, 10Y 1.89%. Volatility in the Cdn govi mkt is back to the lows of Dec, based on Scotia’s SNOVI <index> which measures implied vol across the curve.  The BOC auctions 30Y rrbs at noon, reopening the Dec 1 2050 issue for $400mln (vs $700mln in Nov), with the rrb 50/47 roll having widened to 1.3/1.0 vs an average -0.14 over the past year. 30Y breakevens have consolidated ~145bps having lagged the rally in tips by ~20bps since year end. In corps, ARTIS REIT (BBB low DBRS) issued $250mln Feb 21s @ 190 , a 10-15bp concession. At 180bps the new Artis trades BAs +140 or  ~50bps over the Artis Feb 20 FRNs (BAs +93).

News headlines

Fed minutes to shed light on biggest policy reversal in years (BNN)It was a big reversal: Federal Reserve officials pivoted last month toward keeping interest rates on hold, and now minutes of their meeting may shed light on just how long.

China will not change prudent monetary policy: Premier Li (Reuters) China has not and will not change its prudent monetary policy and will not resort to “flood-like” stimulus, Premier Li Keqiang said on Wednesday.

U.S.-China trade hopes extend equity surge; central banks supportive (Reuters) World stocks hit a four-month high on Wednesday on hopes of progress in trade talks between the United States and China, with a dovish backdrop at major central banks also helping push markets back into the black.

U.S. Futures Drift as Europe, Asia Stocks Advance: Markets Wrap (Bloomberg) U.S. equity futures struggled for direction and stocks in Europe and Asia climbed as investors awaited the release of minutes from the latest meetings of two of the world’s key central banks. The dollar edged higher and the yuan rose after a report America is asking China to keep its currency stable.

ECB to discuss new round of loans to banks soon, Praet says (Reuters) The European Central Bank will soon discuss new, multi-year loans to banks, its chief economist said on Wednesday, but he hinted that a new round of credit may not be as generous as a previous facility.

Amid trade talks, China urges U.S. to respect its right to develop, prosper (Reuters) The United States should respect China’s right to develop and become prosperous, the Chinese government’s top diplomat told a visiting U.S. delegation, reiterating that the country’s doors to the outside world would open wider.

British PM May says Honda plant closure can’t be blamed on Brexit (Reuters) British Prime Minister Theresa May said Honda’s announcement that it would close its factory in England in 2021 was deeply disappointing, but could not be blamed on the country’s upcoming departure from the European Union.

Oil Near Three-Month High as OPEC Cuts Amid Rising U.S. Supply (Bloomberg) Oil held near a three-month high as investors weighed OPEC’s production cuts against estimates of rising crude inventories in the U.S.

Canada’s British Columbia sees surplus, new child benefit (Reuters) Canada’s British Columbia province on Tuesday projected a budget surplus of C$274 million ($207 million) in fiscal 2019-20, with larger surpluses forecast over the following two years and launched a new child benefit program and several initiatives to tackle climate change.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.773%	2 Year	2.487%
5 Year	1.793%	5 Year	2.459%
10 Year	1.889%	10 Year	2.634%
30 Year	2.138%	30 Year	2.977%

US Economic Data

7:00 AM	MBA Mortgage Applications, Feb 15 Actual 3.6% Prior -3.7%
2:00 PM	FOMC Meeting Minutes, Jan 30

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  mixed, 1bp lower in short end with yields out the curve unch, 10Y 2.665%, above avg vol in TY futures (380k). Equities off recent lows, S&P futures (-7.75) , Walmart posting Q4 eps above est, stock up 5% pre-mkt. Core EGBs close to unch, bund curve bull flattening, after disappointing Eurozone eco data – German ZEW current conditions falling to lowest since 2014. GOCs slightly lower in line with tsys, 10Y 1.90%, the CAD slightly lower despite crude rising to the highest level in two months.

News headlines

New round of U.S.-China trade talks to begin in Washington on Tuesday (Reuters) A new round of talks between the United States and China to resolve their trade war will take place in Washington on Tuesday, with follow-up sessions at a higher level later in the week, the White House said.

Global shares slip from four-month high, Swedish crown slumps (Reuters) European and Asian shares hovered near four-month highs on Tuesday as investors took heart from some progress in Sino-U.S. trade talks, while the yen dribbled lower as Japan’s central bank said it could ease policy again.

WTO warns of global trade slowdown as indicator hits nine-year low (Reuters) A quarterly leading indicator of world merchandise trade slumped to its lowest reading in nine years on Tuesday, which should put policymakers on guard for a sharper slowdown if trade tensions continue, the World Trade Organization said on Tuesday.

Despite sanctions, Iran’s oil exports rise in early 2019: sources (Reuters) Iran’s exports of crude oil were higher than expected in January and are at least holding steady this month, according to tanker data and industry sources, as some customers have increased purchases due to waivers from U.S. sanctions.

British supermarkets battle to secure stocks as chaotic Brexit looms (Reuters) Britons could face shortages of fresh food, price rises and less variety if the country leaves the European Union next month without agreeing on trade terms, food industry officials say.

US STOCKS-Futures dip ahead of fresh U.S.-China trade talks (Reuters) U.S. stock index futures dipped on Tuesday, as investors started a holiday-shortened week on a cautious note ahead of a fresh round of trade talks between the United States and China.

Trudeau’s Top Aide Resigns Amid Reports of Meddling in SNC-Lavalin Probe (Bloomberg) Canadian Prime Minister Justin Trudeau has lost his top aide as the controversy over the government’s role in the SNC-Lavalin Group Inc. legal case deepens.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.781%	2 Year	2.504%
5 Year	1.805%	5 Year	2.486%
10 Year	1.9%	10 Year	2.661%
30 Year	2.154%	30 Year	2.995%

US Economic Data

10:00 AM

NAHB Housing Market Index, Feb Surv 59 Prior 58

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Feb 15 Prior 54.3

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

Having previously reached a (fragile) truce on NAFTA and currently appearing to make progress on bilateral trade talks with China, the US now seems to be opening up another front against the EU. The US has been accused of attempting to pressure EU members into opposing the Nord Stream 2 project, while President Donald Trump has stated that European automobile manufacturers are a national security threat. 10-Yr futures continue to trade in a contracting triangle formation with the near term upside focus on the Feb 8 high at 122-15 and the downside focus on the Feb 13 low at 121-21. A bullish break would open the Jan 3 high at 123-08. A break of the triangle base would suggest a run at the 50-dma & Jan 18 low at 121-18/02, below here would enable a run at the Dec 26 low at 120-28.

News headlines

Stocks Mixed as Trade Hopes Fail to Lift Europe: Markets Wrap (Bloomberg) Stocks in Europe and U.S. futures drifted after a rally in Asia boosted shares to their highest level since October on optimism over China’s economy and trade talks. Commodities from oil to copper climbed.

World stocks lifted to 2-1/2 month highs by trade optimism (Reuters) Hopes of progress in Sino-U.S. trade talks and expectations of policy stimulus from central banks lifted world stocks to 2-1/2 month highs on Monday, though European gains were dampened by concerns over the car sector’s outlook.

U.S. agency submits auto tariff probe report to White House (Reuters) The U.S. Commerce Department sent a report on Sunday to U.S. President Donald Trump that could unleash steep tariffs on imported cars and auto parts, provoking a sharp backlash from the industry even before it is unveiled, the agency confirmed.

Brent steadies, set for biggest first-quarter rise since 2011 (Reuters) Brent crude oil steadied on Monday, on track for its strongest first quarter in eight years, thanks to a growing belief among investors that OPEC’s supply cuts will prevent a build-up in unused fuel, though concern over China’s economy offset gains.

Euro gains as U.S.-China trade-talk optimism boosts sentiment (Reuters) The euro rallied and riskier currencies like the Australian dollar strengthened on Monday as optimism over a breakthrough in U.S.-China trade war talks encouraged investors.

European stocks hold onto four-month highs as trade talks progress (Reuters) Fresh from touching their highest level in four months on Friday, European stocks stalled on Monday as investors cashed in their gains ahead of further U.S.-China trade talks in Washington this week.

EU does not see U.S. car imports as national security matter: Germany (Reuters) A spokesman for Germany’s government said it was the European Union’s view that the U.S.’s car imports were not a national security matter, meaning that security could not be a justification for imposing additional tariffs on cars.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.778%	2 Year	2.514%
5 Year	1.802%	5 Year	2.493%
10 Year	1.895%	10 Year	2.663%
30 Year	2.152%	30 Year	2.994%

US Economic Data

There is no US economic data for today.

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