Market Update

US tsys lower, yields 0.5bps higher thru the curve on very light volume in TY futures – 134k less than half avg as Europe is closed, much of Asia as well.  Little reaction to weaker than exp March Personal Income/spending data – PCE deflator 1.8% vs 1.9% exp. The US Congress passed a $1.1trln spending bill that funds the govt thru Sept.  Latest CFTC COT report for April 25th showed large specs continued to reduce shorts across the curve – in 10s specs went from -41k to 214k contracts long, the largest net long since before the 2008 fin’l crisis. GOCs slightly higher, curve flatter, provis unch.

News headlines 

Yen Falls as Stocks Climb on Budget Deal: Markets Wrap (Bloomberg) The yen weakened with bonds, while stocks and U.S. futures climbed, as a tentative deal by the U.S. Congress to avert a government shutdown offset weaker economic data from China and America.

U.S. Congress negotiators set spending plan to avert shutdown, bolster defense (Reuters) Negotiators in the U.S. Congress reached a deal late on Sunday on around $1 trillion in federal funding that would avert a government shutdown later this week, while handing President Donald Trump a down payment on his promised military build-up.

Oil slips below $52 as U.S. drilling, China worries weigh (Reuters) Oil edged below $52 a barrel on Monday as rising crude output and drilling in the United States countered OPEC-led production cuts aimed at clearing a supply glut. U.S. drillers added nine oil rigs in the week to April 28, bringing the count to the most since April 2015, energy services company Baker Hughes said on Friday. Crude output C-OUT-T-EIA in the United States has hit its highest since August 2015, government data shows.

French voters skeptical Macron, Le Pen have answers on key issues (Reuters) A week before the decisive second round in France’s presidential election, many voters are skeptical that either of the two candidates can solve chronic unemployment or tackle security concerns, a poll published on Sunday found.

China April manufacturing growth slows faster than expected (Reuters) Growth in China’s manufacturing sector slowed faster than expected in April, an official survey showed on Sunday, as producer price inflation cooled and policymakers’ efforts to reduce financial risks in the economy weighed on demand.

A house of woes: How Home Capital went from market darling to the brink (Reuters) As Home Capital Group Inc. was having its worst week ever, at least one person in the investment world was smiling. Marc Cohodes, a short seller who has been described as a “scourge of Wall Street” has for more than three years bet on the implosion of the Toronto-based alternative mortgage lender.

Pembina Pipeline Corp to buy Veresen in $9.7 billion deal (Financial Post) Pembina Pipeline Corp said it would buy Veresen Inc in a deal valued at $9.7 billion, including debt, adding natural gas pipelines and processing infrastructure to its oil and natural gas liquids-heavy portfolio.

Overnight markets 

Overview: US 10yr note futures are down 0% at 125-23, S&P 500 futures are up 0.23% at 2386, Crude oil futures are down -0.79% at $48.94, Gold futures are down -0.26% at $1265, DXY is down -0.08% at 98.972, CAD/USD is down 0% at 0.7324.

US Economic Data

8:30 AM Personal Income, Mar, 0.2%, est. 0.3% (prior 0.4%, revised 0.3%)
  Personal Spending, Mar, 0.0%, est. 0.2% (prior 0.1%)
  PCE Core, m/m, Mar, -0.1%, est. -0.1% (prior 0.2%)
  PCE Core, y/y, Mar, 1.6%, est. 1.6% (prior 1.8%)
9:45 AM Markit US Manufacturing PMI,  Apr F, est. 52.8 (prior 52.8)
10:00 AM ISM Manufacturing, Apr, est. 56.5 (prior 57.2)
  ISM Prices Paid, Apr, est. 67.5 (prior 70.5)
10:00 AM Construction Spending, m/m, Mar, est. 0.5% (prior 0.8%)

Canadian Economic Data 

7:00 AM MLI Leading Indicator, m/m, Mar, 0.5% (prior 0.4%, revised 0.4%)
9:30 AM Markit Canada Manufacturing PMI, Apr, (prior 55.5)
10:00 AM Bloomberg Nanos Confidence Index, Apr 28, (prior 59.1)


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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230