Commentaires matinaux

Market Update

US tsys trading weaker, Jan ADP 213k vs 180k exp, yields 1-2bps higher with the 10Y 2.73%.  Equity futures at the highs of o/n session  (S&P +11) – positive earnings from Apple and Boeing while AT&T posted in line eps  while revenues lagged estimates. FOMC later this aft – no change in rates exp  thou Powell is expected to address rumours of a curtailing the runoff in the Fed’s balance sheet.  GOCs lower in line with tsys – Nov GDP tommorrow expcted to show 0.1% decline the first monthly contraction since Jan 2018.

News headlines

Powell to Stress Fed Patience on Rate Hikes: Decision Day Guide (Bloomberg) Jerome Powell will debut the Federal Reserve’s latest communications strategy — a press conference eight times a year — by emphasizing patience in raising interest rates, a message the chairman struggled to deliver in December.

Stocks steady before Fed as Apple relief offsets Brexit complications (Reuters) World stocks and the dollar steadied on Wednesday ahead of policy guidance from the U.S. Federal Reserve, with Apple results providing relief while market confidence that a no-deal Brexit can be avoided took a hit.

Fed likely to hold rates steady as it navigates data blind spots (Reuters) In the six weeks since a confident U.S. Federal Reserve raised interest rates in response to a “strong” U.S. economy, consumer confidence dropped, wholesale prices weakened, financial markets wobbled and home sales fell.

Canada Has Until March to Assess U.S. Request for Huawei CFO (Bloomberg) Canada has until March 1 to assess a U.S. request to extradite the chief financial officer of Huawei Technologies Co. in a case that’s sparked an unprecedented diplomatic dispute as Washington broadens its attack on the Chinese technology giant.

U.S. sends 70 questions to WTO about China’s subsidies (Reuters) The United States has accused China of hiding some trade-distorting subsidy programs from international scrutiny while disclosing others it does not need to, according to a document circulated on Wednesday at the World Trade Organization.

Oil Extends Gain After Rising Most in a Week on Venezuela Crisis (Bloomberg) Oil rises in New York after jumping the most in more than a week on concerns that U.S. sanctions on Venezuela will pose significant market disruption.

U.S., China face deep trade, IP differences in high-level talks (Reuters) The United States and China launch a critical round of trade talks on Wednesday amid deep differences over Washington’s demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 U.S. tariff hike.

TSX futures rise on higher oil prices (Reuters) Futures for Canada’s main stock index edged higher on Wednesday, as oil prices rose on supply concerns after the United States imposed sanctions on Venezuela’s exports.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.857%	2 Year	2.579%
5 Year	1.875%	5 Year	2.557%
10 Year	1.954%	10 Year	2.722%
30 Year	2.18%	30 Year	3.045%

US Economic Data

7:00 AM	MBA Mortgage Applications, Jan 25 Actual -3.0% Prior -2.7%
8:15 AM	ADP Employment change, Jan Surv 181K Prior 271K
10:00 AM	Pending Home Sales MoM, Dec Surv 0.5% Prior -0.7%
	Pending Home Sales NSA YoY, Dec Surv -7.0% Prior -7.7%
2:00 PM	FOMC Rate Decision (Upper Bound), Jan 30 Surv 2.50% Prior 2.50%
FOMC Rate Decision (Lower Bound), Jan 30 Surv 2.25% Prior 2.25%

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 slightly higher, curve 0.5bps steeper, 10Y 2.74% on avg volume in TY futures (316k).  Crude rebounding from yest losses, up 0.85% after the US levied sanctions on Venezuela’s State oil co.  Equities higher in Europe (Stoxx +0.60%), US equity futures higher (S&P +2) – trade talks ongoing between the US & China with the US govt launching criminal charges against Huawei. Gilts underperforming bunds as mkt awaits UK parliament votes on Brexit amendment. GOCs lower in line with tsys, curve unch 10Y 1.96%

News headlines

Powell faces early reckoning on Fed’s $4-trillion question (Reuters) Federal Reserve Chairman Jerome Powell has a problem: how to explain that the Fed may soon begin to taper its ongoing asset-shedding operation without looking like he’s hunkering down for a coming recession, or caving to U.S. President Donald Trump.

Gold reaches seven-month high as stocks, dollar struggle (Reuters) Gold climbed to a seven-month high on Tuesday as markets opted for caution before three major macro events and a blizzard of big tech company earnings in the coming days, starting with Apple later.

Stocks Mixed as Investors Weigh U.S.-China Outlook: Markets Wrap (Bloomberg) It was a mixed picture across global stock markets on Tuesday, with European shares climbing, U.S. futures mixed and Asian equities slipping as investors juggled concerns about the fallout from America’s trade war with China against hopes for progress in this week’s talks.

EU-Canada trade deal is lawful: EU court adviser (Reuters) The EU-Canada free trade deal’s provisions on investor protection are in line with EU law, a senior court adviser said on Tuesday in a recommendation to the European Court of Justice (ECJ) about terms seen by critics as favoring multinationals.

MONEY MARKETS-Dollar LIBOR falls for five straight sessions (Reuters) A key barometer of interbank interest rates declined on Tuesday for the fifth consecutive trading session to its lowest level since early December ahead of the U.S. Federal Reserve’s two-day policy meeting.

Trump to wade into China trade talks as U.S. targets Huawei (BNN) The Trump administration will press China to prove it can keep promises in talks this week aimed at ending the trade war, Treasury Secretary Steven Mnuchin said, as the U.S. ratcheted up legal pressure on one of the biggest examples of Chinese technological might.

U.S. sanctions Venezuela state oil firm, escalating pressure on Maduro (Reuters) The Trump administration on Monday imposed sweeping sanctions on Venezuelan state-owned oil firm PDVSA, aimed at severely curbing the OPEC member’s crude exports to the United States and at pressuring socialist President Nicolas Maduro to step down.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.868%	2 Year	2.583%
5 Year	1.881%	5 Year	2.572%
10 Year	1.959%	10 Year	2.739%
30 Year	2.18%	30 Year	3.069%

US Economic Data

9:00 AM	S&P CoreLogic CS 20-City YoY NSA, Nov Surv 4.90% Prior 5.03%
	S&P CoreLogic CS 20-City MoM SA, Nov Surv 0.40% Prior 0.41%
	S&P CoreLogic CS 20-City NSA Index, Nov Prior 213.89
	S&P CoreLogic CS US HPI YoY NSA, Nov Prior 5.48%
	S&P CoreLogic CS US HPI NSA Index, Nov Prior 206.03
10:00 AM	Conf. Board Consumer Confidence, Jan Surv 124.0 Prior 128.1

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 higher, rebounding from early losses, with the long end outperforming and the 10Y 2.75% (-1bp). Quiet start to otherwise busy week in the US in terms of data with Chicago Fed Index & Dallas Fed Man Index .  Equity futures moving lower (S&P -17) after Caterpillar missed Q4 eps by $0.44 – $2.55 vs $2.99, shares are ~6% lower pre-mkt.  FOMC decision & Non-farm payrolls highlights for the week – Fed chairman Powell may provide more clarity of the topic of balance sheet reduction after last week’s article in the WSJ.

News headlines

$1.5 trillion U.S. tax cut has no major impact on business capex plans: survey (Reuters) The Trump administration’s $1.5 trillion cut tax package appeared to have no major impact on businesses’ capital investment or hiring plans, according to a survey released a year after the biggest overhaul of the U.S. tax code in more than 30 years.

Stock futures dip on weak Caterpillar forecast, China woes (Reuters) U.S. stock index futures dipped on Monday, as weak forecast from Caterpillar added to nerves about Chinese economy, while optimism over the end to the longest U.S. government shutdown in history faded.

Trudeau Ousts China Envoy After Comments About Huawei Case (Bloomberg) Canadian Prime Minister Justin Trudeau has ousted his ambassador to China in the middle of a diplomatic feud with Beijing after a string of public remarks drew criticism.

Explainer: Key Issues, implications of U.S.-China trade talks (Reuters) U.S.-China trade talks will reach a pivotal phase this week when Chinese Vice Premier Liu He comes to Washington for negotiations with his U.S. counterparts, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.

UPDATE 1-Sterling trade turns cautious ahead of parliamentary votes on Brexit (Reuters) The pound slipped on Monday after posting its biggest weekly rise in more than 15 months last week as investors took profits before crucial votes in the British parliament that will aim to break the Brexit deadlock.

Dollar dips as investors prepare for volatile markets, Fed meeting (Reuters) The euro climbed to a 10-day high on Monday as investors sold the dollar and prepared for volatile markets before U.S.-China trade talks and a Federal Reserve policy decision.

Long winter’s nap? Global slowdown, market fears could extend Fed pause (Reuters) Ebbing global growth and shaky financial markets threw the U.S. Federal Reserve off course in early 2016, and it took nearly a year for officials to regain confidence growth would continue and convince investors they would again raise interest rates.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.883%	2 Year	2.609%
5 Year	1.906%	5 Year	2.603%
10 Year	1.988%	10 Year	2.758%
30 Year	2.208%	30 Year	3.064%

US Economic Data

8:30 AM	Chicago Fed Nat Activity Index, Dec Prior 0.22
10:30 AM	Dallas Fed Manf. Activity, Jan Surv -2.7 Prior -5.1

Canadian Economic Data

10:00 AM

Bloomberg Nanos  Confidence, Jan 25 Prior 54.5

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