Market Update Tsys starting mostly unch on very light volume in TY futures (140k), 10Y 2.953%, much of Europe closed for May holiday, as well as Asia. Focus on ISM Manufacturing & FOMC decision tomorrow aft. Equities slightly lower (S&P fut -3.5), crude lower @ 67.88 (-0.70). UK gilts higher, flatter following disappointing UK Manufacturing PMI. GOCs slightly lower before Feb GDP (0.3% exp). BOC Poloz speaks on household debt this aft in the wake of TD’s decision to raise their 5Y mortgage rate by 45bps to 5.59%, the largest hike since 2010. CIBC is expected to announce a 15bp increase in its 5Y rate later today.
News headlines
U.S. Extends Steel Tariffs Relief for EU and Other Allies (Bloomberg) President Donald Trump will delay imposing steel and aluminum tariffs on the European Union, Mexico and Canada until June 1 as he finalizes deals with them, the White House said in a statement. The administration has reached agreements-in-principle with Argentina, Australia and Brazil, according to the statement, which the White House released late Monday night. The details « will be finalized shortly, » the statement added. The U.S. will also extend exemptions for the EU, Canada and Mexico for 30 days to allow for further talks.
The U.S. Just Borrowed $488 Billion, a Record High for the First Quarter (Bloomberg) U.S. Treasury Secretary Steven Mnuchin said he’s unconcerned about the bond market’s ability to absorb rising government debt after his department said it borrowed a record amount for the first quarter. “It’s a very large, robust market — it’s the most liquid market in the world, and there is a lot of supply,” he said in a Bloomberg TV interview on Monday. “But I think the market can easily handle it.”
Netanyahu’s Iran Revelations Were Aimed at an Audience of One (Bloomberg) Israeli Prime Minister Benjamin Netanyahu took the stage in Tel Aviv on Monday to expose what he said was more than a decade of Iranian nuclear deception. Critics said he didn’t reveal anything new. That may never have been the point. From his decision to speak in English to the simplicity of the slides he unveiled — including one that just said “Iran Lied” — Netanyahu’s presentation appeared to be aimed at an audience of one: Donald Trump. And the U.S. president, who is days away from deciding whether to pull out of the Iran nuclear accord, was listening.
U.K. Data Cast Fresh Doubt Over Strength of British Economy (Bloomberg) U.K. manufacturing slowed more than predicted in April and consumers borrowed at the weakest pace in 5 1/2 years in March, adding to signs that the economy’s poor first-quarter performance could persist. IHS Markit said its monthly Purchasing Managers Index was at 53.9, from a downwardly revised 54.9 in March. A 17-month low, it was worse than economists had forecast and hardened expectations the Bank of England will refrain from raising borrowing costs on May 10. The pound fell as much as 0.7 percent.
TSX futures up after Trump extends tariff exemptions (Reuters) Canada’s main stock index was poised to open higher on Tuesday after U.S. President Donald Trump postponed the imposition of steel and aluminum tariffs on the country, the European Union and Mexico.
Canada repeats that U.S. steel tariffs would hurt American jobs (Reuters) Canada has repeated its position that imposing punitive measures would hurt jobs in both countries, in reaction to U.S. President Donald Trump’s decision to postpone the imposition of steel and aluminum tariffs. The Trump administration said on Monday that tariffs on steel and aluminum from Canada and Mexico would be suspended until June 1. Speaking a few hours before the announcement, Canadian Prime Minister Justin Trudeau said tariffs were a “very bad idea” guaranteed to disrupt trade between the two nations.
Amazon to create 3,000 jobs in Vancouver, expand tech hub (BNN) Amazon announced plans on Monday to expand its tech hub in Vancouver, B.C., in a move the company says will create 3,000 new jobs. « Vancouver is home to an incredibly talented and diverse workforce, and these thousands of new employees will invent on behalf of our customers worldwide,” said Alexandre Gagnon, VP of Amazon Canada and Mexico, in a release.
Overnight markets
Overview: US 10yr note futures are down -0.104% at 119-16, S&P 500 futures are down -0.11% at 2644, Crude oil futures are down -1.14% at $67.79, Gold futures are down -0.86% at $1307.9, DXY is up 0.49% at 92.295, CAD/USD is up 0.23% at 0.7768.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.891% | 2 Year | 2.492% |
| 5 Year | 2.126% | 5 Year | 2.802% |
| 10 Year | 2.304% | 10 Year | 2.957% |
| 30 Year | 2.4% | 30 Year | 3.12% |
US Economic Data
| 9:45 AM | Markit US Manufacturing PMI, Apr est 56.5 (56.5 prior) |
| 10:00 AM | Construction Spending MoM, Mar est 0.5% (0.1% prior) |
| ISM Manufacturing, Apr est 58.4 (59.3 prior) | |
| ISM Employment, Apr (57.3 prior) | |
| ISM Prices Paid, Apr est 78.5 (78.1 prior) | |
| ISM New Orders, Apr (61.9 prior) | |
| 05/01 | Wards Domestic Vehicle Sales, Apr est 13.30m (13.42m) |
| Wards Total Vehicle Sales, Apr est 17.10m (17.40m prior) |
Canadian Economic Data
| 8:30 AM | GDP MoM, Feb est 0.3% (-0.1% prior) |
| GDP YoY, est 2.8% (2.7% prior) | |
| 9:30 AM | Markit Canada Manufacturing PMI, Apr (55.7 prior) |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230