Commentaires

Market Update

US tsys higher, yields 2-4bps lower on avg volume in TY futures (330k), 10Y 2.68% (-3.5bps) . Risk off tone with S&P futures -21pts, European equities -0.7%, crude -1.3%. Bunds, UK gilts higher on weak Chinese trade data with both exports and imports well below expectations. In Canada, GOCs are higher in line with tsys, 10Y 1.93%.  Quiet day in terms of data, Dec CPI the highlight on Fri. Little change in the outlook for rate hikes since BOC last week, ~50% odds of one hike priced in for the entire year, thou post Dec FOMC mkts were briefly priced in a BOC rate cut.

News headlines

China’s trade data drags stock futures ahead of Citi results (Reuters) U.S. stock futures dropped on Monday, after data showed China’s exports unexpectedly shrank the most in two years, raising fears of a sharper slowdown in global economic growth and its impact on corporate profits.

China’s exports shrink most in two years, raising risks to global economy (Reuters) China’s exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world’s second-largest economy in 2019 and deteriorating global demand.

China says detained former Canadian diplomat does not have diplomatic immunity (Reuters)  Former Canadian diplomat Michael Kovrig, being held in China on suspicion of endangering national security, is not entitled to diplomatic immunity, China’s foreign ministry said on Monday.

Oil falls to $60 on concerns about China slowdown (Reuters) Oil slipped to around $60 a barrel on Monday after data showed weakening imports and exports in China, the world’s second-largest oil consumer, raising the prospect of a slowdown in fuel demand.

May’s no-Brexit warning sends pound to new 7-week high (Reuters) Sterling strengthened to new seven-week highs against the dollar on Monday as markets seized on Prime Minister Theresa May’s warning that lawmakers’ failure to approve her Brexit deal could lead to the UK staying in the European Union.

Newmont to buy Goldcorp in US$10B mega mining deal (BNN) Newmont Mining Corp. () will buy rival Goldcorp Inc. () in a deal valued at US$10 billion, creating the world’s largest gold miner and cementing a return of M&A to the industry.

Overnight markets

US Economic Data

There is no US economic data for today.

Canadian Economic Data

8:30 AM	Teranet/National Bank HPI MoM, Dec -0.3% Prior -0.3%
	Teranet/National Bank HPI YoY, Dec 2.5% Prior 3.1%
	Teranet/National Bank HP Index, Dec 224.07 Prior 224.74

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, close to o/n highs on strong volume (423k TY), 10Y 2.71 (-3bps) with the curve steeper – Dec CPI expected to have declined 0.1% m/m , core +0.2%. US equity futures lower, S&P -8, Nasdaq -30.  Speculation that Trump may call a state of emergency has buoyed tsys, which are outperforming both bunds and gilts.  UK gilts reversed earlier gains on report Brexit could be delayed beyond March 29th .   GOCs higher, in line with tsys, 10Y 2.95%. USDCAD lower, 1.32 25 as crude  close to one month highs 52.33.

News headlines

Powell says Fed has room to be patient as economy evolves in 2019 (TheGlobeandMail) Federal Reserve Chairman Jerome Powell said on Thursday the U.S. central bank has the ability to be patient on policy given inflation is stable, allowing it to assess whether the U.S. economy will slow this year as some in financial markets worry.

Canadian dollar keeps most of its recent gains as oil prices rise (TheGlobeandMail) The Canadian dollar weakened against its U.S. counterpart on Thursday as the greenback broadly climbed, but the loonie held on to most of its recent gains as stocks and oil prices turned higher.

China to set lower GDP growth target of 6-6.5 percent in 2019 (Reuters) China plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand.

Small steps from stocks after rally, giant leap for yuan (Reuters) Soothing words from the world’s top central banks helped stocks consolidate a strong start to 2019 on Friday, while China’s yuan capped its best week since it shed its dollar peg in 2005.

Oil set for weekly gain on trade optimism, OPEC-led supply cuts (Reuters) Oil prices rose slightly on Friday, putting them on track for solid weekly gains after financial markets strengthened due to hopes the United States and China may soon resolve their trade dispute.

TSX futures point to lower opening (Reuters) Stock futures for Canada’s main stock index edged lower on Friday, a day after hitting a one-month high following a five-day rally.

Pound pares gains as government denies Brexit date might be delayed (BNN) The pound rallied to the highest since November on a report that Brexit could be delayed beyond the March deadline, before paring gains as the government ruled out an extension.

Larger drop in weekly jobless claims points to healthy U.S. economy (TheGlobeandMail) The number of Americans filing applications for jobless benefits fell more than expected last week, pointing to sustained labour market strength that could further assuage concerns about the economy’s health.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.895%	2 Year	2.545%
5 Year	1.904%	5 Year	2.537%
10 Year	1.965%	10 Year	2.713%
30 Year	2.17%	30 Year	3.043%

US Economic Data

8:30 AM	CPI Mom, Dec 0.0% -0.1% est -0.1%
	CPI Ex Food and Energy MoM, Dec 0.2% est 0.2%
	CPI Ex Food and Energy YoY, Dec 2.2% est 2.2%
	CPI YoY, Dec 2.2% est 1.9%

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 trading slightly higher, prices near the bottom of o/n range, strong volume (470k TY futures), 10Y 2.71%, curve steeper with short end outperforming. Equities lower, USD index higher. Limited data due to shutdown (claims, Wholesale sales), multiple Fed speakers including chairman Powell.  In Canada are higher, in line with tsys after cheapening yesterday despite a dovish BOC. 2Y auction today – reopening of the 2.25% Feb 2021s for $3bln (issue size now $12bln or benchmark size). With the curve inverted beyond 2s the 2Y may see some support despite absolute levels not looking that enticing after the rally and vs 1.75% overnite.

News headlines

U.S. weekly jobless claims fall more than expected (Reuters) The number of Americans filing applications for jobless benefits fell more than expected last week, pointing to a strengthening labor market that could further ease concerns about the economy’s health.

Stock futures snap four-day rally as trade talks, retailers disappoint (Reuters) U.S. stock index futures dipped on Thursday, after a solid four-day rally, as lack of details on U.S.-China trade talks gave investors pause, while retailers came under pressure after a couple of disappointing holiday-season reports.

U.S. buyback market support may wane in 2019 (Reuters) U.S. companies’ shopping spree for their own shares helped put a floor on market declines in 2018. Don’t look for the same level of support in 2019.

Bank of Canada holds interest rate as oil slump dims economy’s outlook (National Post) Stephen Poloz’s creative energy appears to have been restored by the holiday break. Canada’s central bank governor, a noted lover of metaphors and similes, introduced a new array of literary descriptions of how monetary policy works at his first public appearance of 2019.

Trudeau touts controversial pipeline project in speech to supporters in B.C. (Globe and Mail)  Prime Minister Justin Trudeau touted the benefits of a liquefied natural gas project that’s at the centre of an impasse with First Nations in a speech to supporters in Kamloops, B.C., on Wednesday. RCMP arrested 14 people Monday in northwestern British Columbia over a protest against construction of a natural gas pipeline by Coastal GasLink, a key part of the $40-billion LNG Canada project.

At China port, tariff drop a salve for hard-hit traders of American cars (Reuters) In the Chinese port city of Tianjin, gray market traders of American-made cars, badly stung by a scything trade war and punitive tit-for-tat tariffs, are scrambling to take advantage of an opportunity they fear may prove only temporary.

Brexit: Theresa May considering Labour MP’s demands on workers rights (BBC) The government is considering giving extra protections to workers and the environment in order to win support for its Brexit withdrawal agreement. The proposals have been put forward by Labour Leave supporter John Mann. Business Secretary Greg Clark said the amendment showed « Parliament coming together » behind the PM’s deal.

Overnight markets

Overview: US 10yr note futures are up 0.103% at 121-27, S&P 500 futures are down -0.51% at 2569.25, Crude oil futures are down -0.74% at $51.97, Gold futures are up 0.06% at $1292.8, DXY is up 0.06% at 95.278, CAD/USD is up 0.12% at 0.7561.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.897%	2 Year	2.541%
5 Year	1.9%	5 Year	2.537%
10 Year	1.962%	10 Year	2.708%
30 Year	2.164%	30 Year	3.019%

US Economic Data

8:30 AM	Initial Jobless Claims, Jan 5th 216k est 226k (231k prior Revised: 233k)
	Continuing Claims, Dec 29th 1722k est 1740k (1740k prior Revised: 1750k)
9:45 AM	Bloomberg Consumer Comfort, Jan 6th (59.6 prior)

Canadian Economic Data

8:30 AM

Building Permits MoM, Nov 2.6% est -0.5% (-0.2% prior Revised: -0.4%)

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