Commentaires matinaux

Market Update

US tsys moving lower, TY futures at lows of o/n session on moderate volume (~335k), 10Y 1.735% (+2bps), MNI citing a WSJ article on earlier than earlier Fed balance sheet runoff , no Fedspeak before FOMC decision next Wednesday, whiel todays US Durable Goods & New Home Sales data are postponed.  EGBs trading mixed, bunds sideways, gilts underperforming before next week’s parliament vote on –  German IFO expecations fell to the lowest since Nov 2012 yet was priced in after yesterdays weak ZEW.  Month end extensions in focus with the Bloomberg-Barclays US Tsy index expected to increase by 0.06yrs vs 0.07 last Jan.  GOCs lower, in line with tsys, 10Y 1.955%, Can/US 2-3bps tighter vs the US wk/wk led by 10s.

News headlines

Fed Officials Weigh Earlier-Than-Expected End to Bond Portfolio Runoff (WSJ)Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they’d expected when they began shrinking those holdings two years ago, putting an end to the central bank’s portfolio wind-down closer into sight.

Global stocks gain on earnings, euro rebounds after dovish ECB (Reuters) Global stocks rose on Friday, as strong earnings helped to underpin investor sentiment in the face of growing signs that the global economy is slowing and a still unresolved trade dispute between the United States and China.

U.S. fund managers play defense during shutdown (Reuters) U.S. fund managers are retreating from consumer-related stocks and increasing exposure to loan-focused companies as investors worry the U.S. government shutdown – now the longest in U.S. history – may leave some deep scars on the economy.

Global shipping rates slump in latest sign of economic slowdown (Reuters) Freight rates for dry-bulk and container ships, carriers of most of the world’s raw materials and finished goods, have plunged over the last six months in the latest sign the global economy is slowing significantly.

Shutdown Talks Signal Potential for Deal Even as Trump Demands Wall (Bloomberg) New negotiations between the Senate’s top Republican and Democrat and the White House signaled the potential for a deal to end the partial government shutdown even as President Donald Trump continued to insist on money for a border wall that Democrats reject.

Canada’s China Ambassador Says He ‘Misspoke’ on Politics of Huawei Case (Bloomberg) Canada’s ambassador to China sought to retract comments suggesting politics would play a role in the potential extradition to the U.S. of a Huawei Technologies Co. executive, adding another setback to weeks of tension between the two countries.

Tech exuberance lifts European shares near two-month highs (Reuters) European shares on Friday hit their highest level in nearly two months as investors flocked to technology stocks after positive U.S. earnings overnight, while news of slowing revenue growth from Vodafone weighed on telecoms.

US STOCKS-Futures higher as upbeat corporate earnings lift sentiment (Reuters) U.S. stock index futures rose on Friday, as upbeat earnings reports lifted market optimism, which has recently been hit by worries about global economic growth, U.S. government shutdown and uncertainty around U.S.-China trade talks.

European shares hit highest level in nearly two months, helped by tech rally (Reuters) European shares on Friday hit their highest level in nearly two months as investors flocked to technology stocks after positive U.S. earnings overnight, while news of slowing revenue growth from Vodafone weighed on telecoms.

Overnight markets

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

Market Update

Rates trade firmer, at/near top end of range on moderate volume, curves mildly flatter at moment; equities bumping around recent highs. Treasuries following EGBs lead after weaker European PMIs. Otherwise, generally quiet as mkts await ECB rate annc shortly. Overnight flow included early selling in 5s, better buying in 2s and 10s during early London hours, prep and real$ buying 10s and 30s more recently. Initial unemployment claims were well below expectations in the Jan 19 wk, -13k to 199k vs 210k expected. Claims were revised down to 212,000 in the Jan 12 wk from the previously reported 213k level. NSA claims were -76,558 in the Jan 19 wk, vs -58,793 seasonal factors expected.

News headlines

ECB keeps policy unchanged but may acknowledge weak growth (Reuters) The European Central Bank left its policy stance unchanged as expected on Thursday, keeping a rate hike later this year on the table even as the euro zone economy suffers its biggest slowdown in half a decade.

Stock futures edge higher, chip results soothe growth worries (Reuters) U.S. stock index futures eked out some gains on Thursday after a string of better-than-feared earnings from chipmakers helped calm concerns over trade tensions and the longest U.S. government shutdown ever.

China says to have in-depth talks with U.S. on economic, trade issues (Reuters) China and the United States will have in-depth discussions on economic and trade issues during Chinese Vice Premier Liu He’s U.S. visit next week, the Chinese commerce ministry said on Thursday.

IMF’s Lagarde: China-U.S. trade tension a major risk to global growth (Reuters) International Monetary Fund Managing Director Christine Lagarde on Thursday reiterated that the major risk facing the global economy was the trade tension between China and the United States.

Oil Slides as Economic and Supply Fears Offset Venezuela Risk (Bloomberg) Oil fell as a darkening outlook for the global economy offset the risk of American sanctions on OPEC member Venezuela’s crude.

Trump Says He’ll Put Off State of the Union Until After Shutdown (Bloomberg) President Donald Trump said he would deliver his State of the Union address when the partial government shutdown is over, clarifying his plans hours after House Speaker Nancy Pelosi blocked him from delivering the speech in the chamber while federal agencies are closed.

Bank of Canada’s next rate move depends on data, says Stephen Poloz, but hike still on the table (FP) Bank of Canada Governor Stephen Poloz said he is keeping a close eye on developments in the nation’s housing market, as well as global trade tensions and the impact of lower oil prices, as he gauges the timing of his next interest rate increase.

Volatility jumps in Canadian oil market after OPEC-style cut (BNNBloomberg)  Calls for a better system to inform the market about Canadian crude inventories, output and shipments are occupying center stage after local price volatility hit unprecedented levels as the country grapples with its worst-ever pipeline crunch.

Pessimistic economic forecasts can’t be going over well at the Ministry of Finance (FP) Last week, the Canadian wing of the news-and-data machine started by U.S. billionaire Michael Bloomberg  introduced us to a new participant in the “short Canada” trade, a hedge fund called Crescat Capital that is betting against this country’s banks. And on Jan. 22, it published the provocative thoughts of Jim Mylonas, a strategist at BCA Research Inc., the Montreal-based research outfit that once employed Stephen Poloz, the Bank of Canada governor. “I think we’re just on the precipice of embarking on a serious recession,” Mylonas told Bloomberg. “It’s not a matter of if, but when.”

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.878%	2 Year	2.573%
5 Year	1.882%	5 Year	2.56%
10 Year	1.946%	10 Year	2.723%
30 Year	2.167%	30 Year	3.038%

US Economic Data

8:30 AM	Initial Jobless Claims, Jan 19 Surv 218K Prior 213K
Continuing Claims, Jan 12 Surv 1730K Prior 1737K
9:45 AM	Markit US Manufacturing PMI, Jan P Surv 53.5 Prior 53.8
	Markit US Services PMI, Jan P Surv 54.0 Prior 54.4
10:00 AM	Leading Index, Dec Surv -0.1% Prior 0.2%

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 1.5-3bps higher, 10Y 2.77%, equities higher (S&P fut +13,  Euro Stocks +0.50%), USD index near lows (DXY -0.09). Quiet day data wise in the US with Redbook retail sales, FHFA home prices and Richmond Fed. Risk on continuation from yest after Larry Kudlow denied an FT article saying a US-China trade meeting this week in the US was cancelled. Core European bonds lower, UK gilts 2bps wider vs bunds (10Y gilt/bund spd 110 bps highest since mod Nov.), GBP above 1.30, on hopes a no-deal Brexit will be avoided.  In Canada, GOCs lower in line with tsys before key Nov Retail Sales (-0.6% exp) –  lower gas prices and auto sales expected to have outsized impact.

News headlines

Trump won’t soften hardline on China to make trade deal: advisers (Reuters) As much as U.S. President Donald Trump wants to boost markets through a trade pact with China, he will not soften his position that Beijing must make real structural reforms, including how it handles intellectual property, to reach a deal, advisers say.

CANADA STOCKS-TSX futures gain as oil prices edge higher (Reuters) Futures for Canada’s main stock index rose on Wednesday, as oil prices gained on optimism after China and Japan said they would use fiscal stimulus to boost economic growth in the face of trade protectionism and faltering global demand.

Investors shun stocks, seek safety in bonds as economic gloom spreads (Reuters) Renewed concerns about a global economic slowdown continued to sap investor appetite for assets considered risky, dragging global stocks and bond yields lower on Wednesday, while the U.S. dollar held near three-week highs.

China says will step up fiscal spending this year to support economy (Reuters) China will step up fiscal spending this year to support its economy, focusing on further cuts in taxes and fees for small firms, finance ministry officials said on Wednesday.

Stocks Gain as Traders Eye Earnings; Dollar Drops: Markets Wrap (Bloomberg) U.S. equity-index futures gained alongside stocks in Europe on Wednesday as traders juggled the latest corporate earnings with moves to end the U.S. government shutdown and doubts over progress on trade talks. The yen slid as the Bank of Japan cut its inflation outlook.

Oil Rises on Expectations of Market Balance, Slower Shale Growth (Bloomberg) Oil recovered after its biggest decline in more than a week on signs U.S. shale supply growth is slowing, and expectations that OPEC’s output cuts are well on their way to balancing the market.

Senate sets votes but U.S. shutdown likely to go on (Reuters) There was no sign of quick relief for 800,000 federal workers going without pay because of the partial government shutdown as the U.S. Senate scheduled votes on competing proposals to end the month-long impasse that both faced long odds.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.908%	2 Year	2.604%
5 Year	1.921%	5 Year	2.601%
10 Year	1.991%	10 Year	2.762%
30 Year	2.206%	30 Year	3.08%

US Economic Data

7:00 AM	MBA Mortgage Applications, Jan 18 actual -2.7% Prior 13.5%
9:00 AM	FHFA House Price Index MoM, Nov Surv 0.3% Prior 0.3%
10:00 AM	Richmond Fed Manufact. Index, Jan Surv -2 Prior -8

Canadian Economic Data

8:30 AM	Retail Sales MoM, Nov Surv -0.6% Prior 0.3%
	Retail Sales Ex Auto MoM, Nov Surv -0.4% Prior 0.0%

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