Commentaires

Market Update

US tsys trading higher, on heavy volume in TY futures (600k), 10Y 2.755(-3bps). Risk off tone (S&P futures -17, crude 52.94 -1.6%) driven by ongoing trade concerns, as the US is intensifying efforts to have a Huawei executive extradited to the US, according to an article in the Globe & Mail. The US shutdown extends to day 32 with House democrats vowing to reject Trump’s latest proposal to reopen the govt .  Core EGBs higher, 10y bunds 1.5bps lower – the ZEW fell sharply in Jan to 27.6 from 43, while expectations came in slightly above exp at -15 vs -18. In Canada, GOCs are higher, lagging tsys by 1bp with the 10Y 1.995%.  Wholesale Trade and Manufacturing Sales for Nov both coming in weaker than exp –  Wholesale Sales -1.0% m/m the largest drop since Mar 2016. Nov Retail Sales scheduled for tomorrow  -0.6% exp

News headlines

China demands U.S. drop Huawei extradition request with Canada (BNN) China on Tuesday demanded the U.S. drop a request that Canada extradite a top executive of the tech giant Huawei, shifting blame to Washington in a case that has severely damaged Beijing’s relations with Ottawa.

The Daily Chase: TSX hot streak continues; Notley lands energy investment (BNN) The S&P/TSX Composite Index is sporting the 12th best year-to-date return of any stock market around the world after logging its 12th straight day of gains yesterday; over that span, Canadian stocks have rallied 8.03 per cent.

Stock futures lower on global growth worries after IMF trims outlook (Reuters) U.S. stock index futures fell on Tuesday, as investors were hit by fears of global economic slowdown after the International Monetary Fund trimmed its growth forecasts in a week of heavy corporate earnings.

Oil drops nearly 2 percent as China slowdown bites (Reuters) Oil prices fell nearly 2 percent on Tuesday on signs that an economic slowdown in China is spreading, stoking concerns about global growth and fuel demand.

China’s growth slowed by service, farm sectors, despite construction rebound (Reuters) Weakness in the service and farm sectors slowed China’s economic growth in the fourth quarter, despite a strong pickup in construction activity, official data showed on Tuesday.

Global Stocks Fall, Bonds Rise as Risk Rally Flags: Markets Wrap (Bloomberg) Stocks dropped on Tuesday alongside U.S. futures as a cloudy outlook for trade and growth continued to weigh on risk appetite. Treasuries climbed and the yen strengthened.

Spanish yields hit six-month lows after record demand at 10-year bond sale (Reuters) Spain’s long-dated government bond yields fell to six-month lows on Tuesday after a new 10-year bond, sold via a syndicate of banks, attracted record demand.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.92%	2 Year	2.589%
5 Year	1.933%	5 Year	2.593%
10 Year	1.997%	10 Year	2.752%
30 Year	2.218%	30 Year	3.065%

US Economic Data

8:30 AM	Wholesale Trade Sales MoM, Nov Surv -0.3% Prior 1.0%
	Manufacturing Sales MoM, Nov Surv -1.0% Prior -0.1%

Canadian Economic Data

10:00 AM	Existing Home Sales, Dec Surv 5.24m Prior 5.32m
	Existing Home Sales MoM, Dec Surv -1.5% Prior 1.9%

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

T-Notes initially drew support from the latest BBG story re: U.S.-China trade talk impasse, with risk-off flows apparent in the wake of the story hitting, although the contract stuck to a narrow range, with U.S. cash markets closed for Martin Luther King Day. Tsys futures pulled back from best levels on the back of Chinese GDP data meeting exp., on both a 2018 & Q418 basis. Futures then ticked back to best levels subsequently, with little in the way of fresh news flow apparent. With the U.S. closed for a market holiday, focus Monday is set to fall on Brexit matters in the UK.

News headlines

Global stock markets falter after China data, Brexit Plan B awaited (Reuters) European shares fell on Monday from recent six-week highs as a global equity rally stalled after data confirmed a slowdown in China’s economy and investors awaited for Britain’s next steps to break the deadlock over Brexit.

Trump, Democrats Inch Closer Amid Personal Shutdown Sniping (Bloomberg) Donald Trump and senior Democrats took their first steps toward a possible compromise deal on immigration and border security over the weekend, even as the president ramped up his feud with Speaker Nancy Pelosi with the government shutdown in its fifth week.

TSX futures slip on lower crude prices (Reuters) Futures for Canada’s main stock index edged lower on Monday as oil prices dropped after data showed the Chinese economy slowed last year.

Stocks Mixed as Investors Weigh Latest on Trade: Markets Wrap (Bloomberg) European stocks and U.S. equity futures slipped on Monday while Asian markets posted modest gains as investors assessed the latest headlines on the economy and trade. The dollar was steady, while bonds in Europe were mixed.

China’s 2018 growth slows to 28-year low, more stimulus seen (Reuters) China’s economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to the lowest in nearly three decades and pressuring Beijing to roll out more stimulus to avert a sharper slowdown.

Canadian Oil Surge Fails to Lift Producers Out of the Doldrums (Bloomberg) Alberta’s crude curtailment plan has caused a dramatic rise in the price of heavy Canadian oil. But for shares of energy companies, it hasn’t been as much of a help.

China’s Huawei in unprecedented media blitz as it battles heightened scrutiny (Reuters) China’s Huawei has launched an unprecedented public relations blitz, thrusting its low-key founder in front of international media as the telecoms firm seeks to ease concern among Western nations bent on shutting it out of their markets.

Sterling volatile before May’s Brexit ‘Plan B’ (Reuters) Sterling edged off early lows but remained volatile on Monday as traders awaited a statement from Prime Minister Theresa May in parliament on her plans to break a deadlock over Brexit.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.937%	2 Year	2.614%
5 Year	1.95%	5 Year	2.623%
10 Year	2.018%	10 Year	2.784%
30 Year	2.241%	30 Year	3.097%

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

Tsys slightly lower, 10Y 2.76% (+1bp), above avg volume in TY futures (420k), core EGBs also lower on ‘risk on’ flows while EU peripheral spreads are tighter. Stocks trading well on optimistic outlook for US-China trade after WSJ mentioned US officials were discussing lifting tariffs, S&P futures +11, crude 52.80 (+1.3%). GOCs lower, 0.5bps tighter vs tsys, 10y Can/US -76bps three-week narrows.  Dec CPI on deck, -0.4% m/m or 1.7% y/y exp with the core +1.9%. A monthly decline would follow the 0.4% pullback in Nov, the weakest since last Dec- thou seasonality is definitely at play with seven of the last eight yrs showing declines in Dec –  the drop in gasoline prices a prime contributor, along with seasonal weakness in other categories.

News headlines

Global stocks advance as trade hopes aid rally; oil rises (BNN) Stocks rose in Europe and Asia on Friday alongside U.S. equity futures, building on the recent rally in risk assets amid further optimism for trade talks between America and China. Treasuries and the yen edged lower, while crude climbed.

TSX futures rise as oil prices gain on OPEC’s production cut (Reuters) Futures for Canada’s main stock index rose on Friday, as oil prices gained after a report from the Organisation of the Petroleum Exporting Countries (OPEC) showed its production fell sharply last month.

Pound set for biggest weekly gain vs euro in more than a year on Brexit hopes (Reuters) The pound weakened on Friday as investors took profits after a stellar rally this week that set the currency up for its biggest weekly gain against the euro in more than a year on growing confidence that a no-deal Brexit can be avoided.

Canada’s Huawei 5G Decision Is Months Away, Sources Say (Bloomberg) Canada is still conducting its security review of 5G telecommunications technology, and a decision on whether to restrict Huawei Technologies Co. is still at least months away, people familiar with the plans say.

Trump meets with Cabinet officials to revive infrastructure push (Reuters) U.S. President Donald Trump is reviving efforts to win approval for a significant infrastructure plan lasting up to 13 years, two people briefed on the matter said, as the administration seeks to bring a long-stalled campaign promise back to life.

Shutdown clouds outlook for consumer-driven U.S. economic growth (Reuters) After tax cuts, rising incomes and buoyant stock markets set off a consumer boom in 2018, signs are emerging that the main engine of U.S. economic growth could sputter, and a record-long government shutdown further muddies the waters.

Greece plans five-year bond once Macedonia accord has passed (Reuters) Greece plans to return to bond markets with a five-year syndicated issue once a parliamentary vote on a long-running dispute with neighbouring Macedonia is out of the way, two sources told Reuters on Friday.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.909%	2 Year	2.576%
5 Year	1.93%	5 Year	2.588%
10 Year	2.002%	10 Year	2.761%
30 Year	2.234%	30 Year	3.083%

US Economic Data

8:30 AM	Industrial Production MoM, Dec Surv 0.2% Prior 0.6%
9:15 AM	Capacity Utilization, Dec Surv 78.5% Prior 78.5%
10:00 AM	U. of Mich Sentiment, Jan P Surv 96.8 Prior 98.3

Canadian Economic Data

8:30 AM	CPI NSA MoM, Dec -0.1% Surv -0.4% Prior -0.4%
	CPI YoY, Dec 2.0% Surv 1.7% Prior 1.7%

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