Comments

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

Market Update

US tsys trading lower, yields 2-2.5bps higher, 10Y 2.68% (+2.5bps), roll from March to June responsible for volume in TY futures (590k).  S&P futures higher, emini above 2,800 for first time since Dec 3rd.  Trump said he would extend the tariff deadline on Chinese goods beyond march 1st, China CSI comp +6%. GE trading 18% higher pre-mkt on news it will sell its Biotech business to Danaher for $21bln, proceeds will be used to reduce debt. Prelim estimate for Bloomberg-Barclays US month end extension 0.12yrs same as last yr and one yr avg of 0.08. The US auctions $40bln in 2Y notes at 11:30 and $41bln in 5Y notes at 1:00 ET.  GOCs lower, lagging the decline in tsys by ~0.5bps, 10Y 1.91% – volatility in the 10Y part of the curve (based on bollinger band width) at the lows since last Sept. Jan CPI on Wednesday, Q4 GDP Friday highlights for the week, the latter expected at 1.0% vs 2.0% Q3.

News headlines

Trump delays tariff hike on Chinese goods, citing trade talk progress (Reuters) President Donald Trump said on Sunday he would delay an increase in U.S. tariffs on Chinese goods thanks to “productive” trade talks and that he and Chinese President Xi Jinping would meet to seal a deal if progress continued.

Stocks Climb as China Soars on Optimism Over Trade: Markets Wrap (Bloomberg) U.S. equity futures advanced alongside stocks in Europe and Asia after President Donald Trump postponed the date for boosting tariffs on Chinese imports, taken as a sign of progress in the trade talks. Bonds fell and the dollar retreated.

Oil Holds Near Three-Month High as U.S. Extends Truce With China (Bloomberg) Oil steadied near a three-month high in New York as a U.S. move to extend a trade truce with China raised hopes that the world’s two biggest economies would soon resolve a stand-off on tariffs.

Trump calls on OPEC to ‘relax,’ says oil prices are too high (Reuters) U.S. President Donald Trump on Monday expressed concern about oil prices and repeated his previous calls on the Organization of the Petroleum Exporting Countries (OPEC) to keep prices steady.

China January soybean imports from U.S. nearly double vs. December: customs (Reuters) China’s imports of U.S. soybeans nearly doubled in January from the previous month as cargoes booked after a Sino-U.S. trade truce arrived in the world’s top oilseed importer, according to Chinese customs data published late on Monday.

Barrick bids $18 billion for Newmont in gold mega-merger (Reuters) Canada’s Barrick Gold Corp offered to buy U.S. rival Newmont Mining Corp for nearly $18 billion in stock on Monday, in a deal that would combine the world’s two largest gold producers.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.789%	2 Year	2.51%
5 Year	1.817%	5 Year	2.491%
10 Year	1.912%	10 Year	2.675%
30 Year	2.16%	30 Year	3.035%

US Economic Data

8:30 AM	Chicago Fed Nat Activity Index, Jan Surv 0.15 Prior 0.27
10:00 AM	Wholesale Inventories MoM, Dec P Surv 0.3% Prior 0.3%
	Wholesale Trade Sales MoM, Dec Surv -0.3% Prior -0.6%
10:30 AM	Dallas Fed Manf. Activity, Feb Surv 4.9 Prior 1.0

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Feb 22 Prior 54.8

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 higher, 10Y 2.68% (-1bp), avg volume in TY futures (320k). EGBs outperforming, gilt yields in risk-off mode before ECB Draghi comments this aft and weak German business confidence data.  Equity futures higher (S&P +11) on more US/China trade talk news, and despite a ~20% plunge in Kraft after the co. revealed it is under an SEC investigation. Raft of Fed speakers today including VC Clarida and Harker in panel discussion in NYC.  GOCs rallying, 10Y below 1.90% before Dec Retail Sales (exp -0.3% vs -0.9% Nov). Yest BOC Poloz  said future rate hikes are uncertain due to the risk of a housing downturn and weak investment.  Ford bonds 5-10bps wider on emissions testing inaccuracies, Kraft Heinz also wider on SEC news.

News headlines

A Fed pivot, born of volatility, missteps, and new economic reality (Reuters) The Federal Reserve’s promise in January to be “patient” about further interest rate hikes, putting a three-year-old process of policy tightening on hold, calmed markets after weeks of turmoil that wiped out trillions of dollars of household wealth.

CANADA STOCKS-Trade optimism, higher oil prices lift TSX futures (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Friday on hopes that Washington and Beijing are on course to resolve their trade dispute.

Euro zone core inflation edges higher in Jan (Reuters) Euro zone headline consumer inflation slowed slightly in January because of a sharp deceleration of energy price growth, but core inflation watched closely by the European Central Bank in policy decisions edged slightly higher, data showed on Friday.

U.S., China haggle over toughest issues in trade war talks (Reuters) Top U.S. and Chinese trade negotiators haggled on Thursday over the details of a set of agreements aimed at ending their trade war, just one week before a Washington-imposed deadline for a deal expires and triggers higher U.S. tariffs.

EU debates how and when to start trade talks with Trump (Reuters) European ministers will begin debating on Friday how and when to start trade negotiations with the United States, aware that U.S. President Donald Trump may impose punitive tariffs on EU car imports if the bloc waits too long.

Stocks Climb With Bonds Before Trump-China Meeting: Markets Wrap (Bloomberg) U.S. equity futures extended gains on Friday alongside stocks in Europe as investors awaited results from top-level trade talks between America and China. Oil rose, while Treasuries posted a modest advance.

Oil Set for Second Weekly Gain on Trade Optimism and OPEC Curbs (Bloomberg) Oil headed for a second weekly increase as the U.S. and China worked on resolving their trade impasse, and as output cuts by OPEC and its allies balanced surging American supply.

Bank of Canada’s Poloz says rate hike path ‘highly uncertain’ (BNN) Bank of Canada Governor Stephen Poloz said the path toward higher interest rates is “highly uncertain” due to lingering questions around housing and investment, even as he stuck to his message that borrowing costs eventually need to head higher.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.789%	2 Year	2.52%
5 Year	1.81%	5 Year	2.507%
10 Year	1.907%	10 Year	2.679%
30 Year	2.161%	30 Year	3.036%

US Economic Data

Canadian Economic Data

8:30 AM	Retail Sales MoM, Dec Surv -0.3% Prior -0.9%
	Retail Sales Ex Auto MoM, Dec Surv -0.3% Prior -0.6%

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