Commentaires

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

Market Update

Tsys moving higher on avg volume (350k TY), 10Y 2.71% (-0.5bps), tsy curve 0.5bps flatter 2s30s, ‘risk off’ after Morgan Stanley Q4 earning miss, shares down 4% pre-mkt equities lower. Tsys off the highs after strong Jan Phili Fed – 17 vs 9.5 exp.  Equity futures paring earlier losses S&P -5 from -15 pre data,  Euro stocks  down ~0.50%. GOCs higher, outperforming tsys  by 0.5-1.5bps, 10Y 1.975 (-2bps), Mar24/5Y roll unch 0.7bps after yesterday’s 5Y auction.  Provis opening 0.5bps wider, Ont 28 83.5 , Ont 48/28 roll unch 13.5/13.

News headlines

Trudeau’s U.S. envoy confident on new NAFTA passage, tariff relief (BNN) Canada’s ambassador to Washington is confident that the U.S. will both pass the revised North American trade deal and lift tariffs on steel and aluminum.

Shutdown is starting to hurt Trump’s financial deregulation agenda (Reuters) The U.S. government shutdown over President Donald Trump’s call for Congress to fund a wall he promised to build on the U.S.- Mexican border is threatening another campaign pledge to make rules easier to navigate for banks and corporations.

Stocks turn red, pound finds some peace (Reuters) Concern over China’s economic outlook and possible U.S. tariffs on European cars dragged stocks lower on Thursday, while an anti-climactic end to the latest chapter in the Brexit saga offered sterling a moment’s peace.

‘Pretty impressive’: TSX bounces back amid nine-day winning streak (BNN) All of a sudden, Canada is sporting one of the best-performing stock exchanges in the world. The S&P/TSX Composite Index heads into Thursday’s trading session riding a nine-day winning streak. Over that period, Canadian stocks have climbed more than six per cent.

Riven by crisis, UK searches for Brexit emergency ‘plan B’ (Reuters) Prime Minister Theresa May will try on Thursday to break the impasse in Britain’s political elite over how to leave the European Union by searching for an emergency exit deal, though there is so far little sign of compromise.

U.S. Futures Slip With European Stocks; Oil Drops: Markets Wrap (Bloomberg) U.S. equity futures and European shares fell on Thursday following a mixed session in Asia amid concerns about rising tension between America and China and after weak bank earnings. The dollar was steady and Treasuries edged higher.

Feud with Canada ‘not good’ for corporate China: Ambassador (BNN) Canada’s ambassador to China warned that the spiraling diplomatic feud between the nations was damaging Beijing’s reputation, as the U.S. joined countries criticizing a Canadian citizen’s death sentence as “politically motivated.”

China Quietly Cuts Borrowing Costs While Keeping Rates on Hold (Bloomberg) The People’s Bank of China has been quietly guiding interbank borrowing costs down without actually cutting official interest rates, with the latest move a record one-day injection of cash into the market.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.908%	2 Year	2.529%
5 Year	1.922%	5 Year	2.529%
10 Year	1.985%	10 Year	2.711%
30 Year	2.209%	30 Year	3.056%

US Economic Data

8:30 AM	Philadelphia Fed Business Outlook, Jan surv 9.5 actual 17.0 prior 9.4
	Initial Jobless Claims, Jan 12 surv 220K actual 213K prior 216K
	Continuing claims, Jan 5 surv 1734K actual 1737K prior 1722K
	Bloomberg Consumer Comfort, Jan 13 Prior 58.5

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