Commentaires matinaux

Market Update

US tsys trading sharply higher, yields 3-4bps lower, 10Y 2.66%, on heavier volume in TY futures ( ~450k). The latest uptick in prices within the last hour after BOE decision (2019 growth forecast downgraded to 1.2% from 1.7%), Carney warning that Brexit uncertainty weighing on economy. The ECB lowered its forecast for 2019 GDP growth for the Eurozone to 1.3% from 1.9% in Nov. , Italy from 1.2% to 0.2% – BTPs ~10bps wider vs bunds.  US stock futures lower (S&P -16/0.60%, Nasdaq -48) the USD higher for a sixth day. GOC yields lower, 1-1.5bps tighter vs tsys. No data in Canada today – Jan Employment tomorrow. The BOC auctions $3bln new 2Y bonds at noon – May 2021s with the WI roll 0.6/0.4 (unch)

News headlines

Futures down as growth worries resurface (Reuters) U.S. stock futures fell on Thursday as worries of slowing global growth resurfaced after the European Union cut its economic growth forecasts, while investors waited for the next breakthrough in U.S.-China trade negotiations.

Bank of England sees weakest UK outlook since 2009 on Brexit, global slowdown (Reuters) The Bank of England said Britain faced its weakest economic growth in 10 years in 2019, blaming mounting Brexit uncertainty and the global slowdown, but it stuck to its message that interest rates will rise if a Brexit deal is done.

EU slashes euro zone growth outlook, expects inflation to slow (Reuters) The European Commission sharply cut on Thursday its forecasts for euro zone economic growth this year and next because it expects the bloc’s largest countries to be held back by global trade tensions and an array of domestic challenges.

World shares go weak as data disappoints, dollar extends power surge (Reuters) Mounting global growth worries thrust share markets into reverse on Thursday, while the dollar scored its longest winning run since a hot streak in early October that helped trigger a wave of worldwide ‘bear’ markets.

Euro slips to two-week low after EU cuts growth forecast (Reuters) The euro fell to a two-week low on Thursday after the European Commission sharply cut its forecasts for economic growth in the euro zone.

Partial oil upgrading the latest fix for Canada’s pipeline problem (Reuters) Canada’s struggling oil industry is looking to what is known as partial upgrading technology to thin its sludge-like crude and squeeze more of it through congested pipelines.

TSX futures fall on lower oil prices (Reuters) Futures for Canada’s main stock index fell on Thursday, pressured by a slip in crude prices.

Trump nominates global-order critic Malpass to lead World Bank (BNN) President Donald Trump nominated senior Treasury official David Malpass to lead the World Bank, choosing a loyalist who has been sharply critical of China and has called for a shakeup of the global economic order.

U.K. and Canada Can Avoid New Tariffs Post-Brexit, Envoy Says (Bloomberg) The U.K.’s top envoy to Canada says she’s confident the two countries can avoid new tariffs after Brexit scuttles their existing trade agreement.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.783%	2 Year	2.498%
5 Year	1.8%	5 Year	2.471%
10 Year	1.89%	10 Year	2.668%
30 Year	2.146%	30 Year	3.012%

US Economic Data

8:30 AM	Initial Jobless Claims, Feb-02 Surv 221k Prior 253k
	Continuing Claims, Jan-26 Surv 1733k Prior 1782k
9:45 AM	Bloomberg Consumer Comfort, Feb-03 Prior 57.4
3:00 PM	Consumer Credit, Dec Surv $17.000b Prior $22.149b

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 slightly higher, yields ~0.5bps lower across the curve on avg volume in TY futures (300k), 10Y 2.69%.  European equities flat, US futures slightly lower, crude lower for at third day (53.58).  Core EGBs mixed – bunds unch despite weaker Factory Orders and construction data. 10Y gilt yields at weekly lows 1.225%, Brexit related headlines with talk of an extension to the deadline and EU Donald Tusk reiterating the Eu will not make a new offer on Brexit. GOCs outperforming tsys by 0.5bps, 10Y 1.92% before Building Permits & Jan Ivey PMI.  In corps, CNR issued $800mm 2 tranche deal – $350mm 10Y @ 109 & $450mm 30Y @ 145 –  bonds tightened 1bp initially before closing unch. Provis opening 1bp wider, long supply expected (HQ, Alta).

News headlines

Futures dip after key Trump speech (Reuters) U.S. stock futures edged lower on Wednesday after President Donald Trump at his State of the Union speech raised the prospect of another shutdown should his demand for border wall funding not be met.

Stocks Drift as Dollar Advances; Iron Ore Rises: Markets Wrap (Bloomberg) U.S. equity futures and European stocks struggled for direction on Wednesday amid mixed reports from corporate heavyweights and after a drop in German factory orders added to signs that the euro area’s economy is losing momentum. The dollar extended its advance as Treasuries edged higher.

Huawei Likely Faces 5G Ban in Canada, Security Experts Say (Bloomberg) Canada will probably ban Huawei Technologies Co. from its 5G network, analysts and security experts say, though Prime Minister Justin Trudeau may delay the decision as long as possible to avoid jeopardizing three Canadians detained in China.

Trump calls again on Congress to act on aging infrastructure needs (Reuters) President Donald Trump asked U.S. Congress in his State of the Union address on Tuesday to pass legislation to boost the nation’s aging infrastructure, without providing details on how to go about paying for it or how much it would cost.

TSX futures little changed as oil prices dip (Reuters) Stock futures pointed to a flat opening for Canada’s main stock index on Wednesday, with oil prices dipping on a surprise rise in U.S. crude inventories.

U.S.’ Mnuchin, Lighthizer to hold talks next week in China: sources (Reuters) Senior U.S. and Chinese officials are poised to start another round of trade talks in Beijing next week to push for a deal to protect American intellectual property and avert a March 2 increase in U.S. tariffs on Chinese goods, two people familiar with the plans said on Tuesday.

Fed’s Kaplan urges no further rate action until outlook is clearer (BNN) Federal Reserve Bank of Dallas President Robert Kaplan said he’s waiting on clarity about the U.S. economic outlook before supporting further moves on interest rates, but he expects the picture might start to clear up in coming months.

China says U.S. report on its WTO compliance lacks factual basis (Reuters) China opposes a report by the U.S. Trade Representative’s office on its World Trade Organization (WTO) compliance, the commerce ministry said, saying it is inconsistent with the facts.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.815%	2 Year	2.52%
5 Year	1.841%	5 Year	2.507%
10 Year	1.926%	10 Year	2.693%
30 Year	2.17%	30 Year	3.028%

US Economic Data

7:00 AM	MBA Mortgage Applications, Feb 1 Actual -2.5% Prior -3.0%
8:30 AM	Trade Balance, Nov Surv -$54.0b Prior -$55.5b

Canadian Economic Data

8:30 AM	Building Permits MoM, Dec Surv -1.0% Prior 2.6%
10:00 AM	Ivey  Purchasing Managers Index SA, Jan Prior 59.7

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 on low volume in TY futures (250k), yields 0.5-1bp higher with the 10Y 2.73%, taking their cue from mild risk on tone in Europe, with EGBs underperforming tsys, 10y bund +2bps @ 1.93% – the Euro Stoxx index at a two-month high, while the SPX is above key 63% retracement of the Oct -> Dec decline (2713). Data on tap in the US includes Market Services Index for Jan and the ISM non-man index while the US auctions $38 bln in 3Y notes at 1:00PM. GOCs lower in line with tsys, 10Y 1.97%, some early steepening in 10s30s 1bp wider 24.1bps.

News headlines

Exclusive: Fed could raise rates as much as twice this year – BlackRock’s Rieder (Reuters) The Federal Reserve wants to raise interest rates one to two more times this year and will do so if inflation gathers steam, BlackRock Inc’s Rick Rieder told Reuters this week.

Futures advance, Trump’s State of the Union speech in focus (Reuters) U.S. stock futures posted small gains on Tuesday as investors navigate through the busy earnings season, while waiting for President Donald Trump’s State of the Union address.

Draghi’s long farewell may delay ECB guidance move: sources (Reuters) Some European Central Bank policymakers are reluctant to alter their guidance on interest rates as a move could tie the hands of the bank’s next president many months before an appointment is even made, four sources close to the matter said.

In squeezed oil industry, some rethink hunt for new barrels (Reuters) New partnerships are emerging in the global hunt for oil discoveries, with some explorers essentially offering an outsourcing service for the riskiest part of the energy business.

UK PM May told ministers she wants legally binding changes to Brexit deal (Reuters) Prime Minister Theresa May told her top ministers on Tuesday her objective was to secure legally binding changes to Britain’s EU exit deal to ensure that the country could not be trapped indefinitely in the Northern Irish backstop, her spokesman said.

Slump in Canadian consumer confidence shows no sign of reversing (BNN) A one-year slide in Canadian consumer confidence showed little sign of improving in January, with sentiment levels hovering at depressed levels amid turmoil in financial markets and signs the nation’s economy has hit a soft patch.

Trade hawks quietly bristle as Trump guns for deal with China (BNN) One of Donald Trump’s most persistent economic promises has been to rewrite the U.S. relationship with China. Yet as he approaches a potential deal, some of the very hawks who have cheered on the president’s trade war already fear he may end up falling short.

Iran criticizes Greece, Italy for not buying its oil despite U.S. waivers (Reuters) Iran’s oil minister on Tuesday criticized Greece and Italy for not buying its oil despite U.S. waivers and said they had not offered Tehran any explanation for their decision.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.845%	2 Year	2.543%
5 Year	1.88%	5 Year	2.545%
10 Year	1.973%	10 Year	2.732%
30 Year	2.21%	30 Year	3.067%

US Economic Data

9:45 AM	Markit US Services PMI, Jan F Surv 54.2 Prior 54.2
Markit US Composite PMI, Jan F Prior 54.5
10:00 AM	ISM Non-Manufacturing  Index, Jan Surv 57.1 Prior 57.6

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