Market Update

Tsys lower, US 10Y 2.515% (+1.5bps), on above avg volume in TY futures (370k), extending weakness from yesterday’s post FOMC press conference where Powell described tepid inflation readings as ‘transitory’.  US equity futures slightly higher, crude -1.6% at 62.60 after EIA inventory data showed an increase of 5.5mln barrels for the third week of April. EGBs mixed, German 10Y bunds unch, UK gilts giving up earlier gains from BOE 9-0 decision to leave rates unchanged, Carney saying rate hikes will be needed than the market expects while anticipating a smooth Brexit transition.  GOCs lower in line with tsys, 10Y 1.72%.

News headlines

Stocks Mixed as Focus Turns to Earnings and Trade: Markets Wrap (Bloomberg) Stocks were mixed on Thursday as investors switched their focus from monetary policy back to company earnings and the outlook for global trade. Treasuries retreated.

Oil Extends Loss as Rising U.S. Inventories Counter Supply Risks (Bloomberg) Oil declined for a second day, trading near $63 a barrel in New York, as a massive surge in U.S. crude stockpiles allayed worries about supply disruptions around the world.

Auto sales dip 3.5% in April as downward trend continues (BNN) DesRosiers Automotive Consultants Inc. says light vehicle sales fell an estimated 3.5 per cent in April from a year earlier as a downward trend in Canadian auto sales continued.

Factories on the mend in April but still struggling (Reuters) Global factory activity recovered a little last month but still appeared to be in the doldrums as demand remained weak and trade protectionism concerns prominent, while stimulus measures had yet to fully kick in.

Bank of England ups growth view, Brexit keeps rate rise on ice (Reuters) The Bank of England lifted its growth forecasts on Thursday but warned Brexit continued to cloud the outlook for Britain’s economy and said there was little immediate risk from waiting for a clearer view before raising interest rates.

Turkey’s Erdogan says determined to lower interest rates to targeted levels (Reuters) President Tayyip Erdogan said on Thursday he was determined to lower interest rates to targeted levels and described recent comments on falling central bank forex reserves as aimed at creating negative sentiment towards Turkey.

U.S. Fed holds key rate steady, reiterates patience on future path (BNN) Federal Reserve Chairman Jerome Powell said U.S. inflation is possibly being dragged down by “transitory” forces and there is no bias to either tighten or ease monetary policy.

Alberta enacts law that could cut energy flows to British Columbia (Reuters) The new Alberta government has enacted a law enabling it to restrict the flow of oil and gas to neighboring British Columbia, raising the stakes in a dispute between Canada’s westernmost provinces over the Trans Mountain pipeline.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.602% 2 Year 2.331%
5 Year 1.579% 5 Year 2.323%
10 Year 1.73% 10 Year 2.523%
30 Year 1.978% 30 Year 2.916%

US Economic Data

08:30 AM Initial Jobless Claims, Apr 27 Survey 215k Prior 230k
     Continuing Claims, Apr 20 Survey 1660k Prior 1655k
  Nonfarm Productivity, 1Q P Survey 2.2% Prior 1.9%
09:45 AM Bloomberg Consumer Comfort, Apr 28 Survey — Prior 60.8
10:00 AM Factory Orders, Mar Survey 1.50% Prior -0.50%
     Durable Goods Orders, Mar F Survey — Prior 2.70%
     Durables Ex Transportation, Mar F Survey — Prior 0.40%
     Cap Goods Orders Nondef Ex Air, Mar F Survey — Prior 1.30%
     Cap Goods Ship Nondef Ex Air, Mar F Survey — Prior -0.20%

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