Market Update
Tsys lower after claims & Q1 prod. Data , after a risk on overnite session. US 10Y 2.352% (+3bps), Euro equities at new highs up 0.80%, S&P futures +5.5. Stocks buoyed by polls showing Macron won TV debate ahead of Sunday’s run-off EGBs pressured by strong EU econ data & supply – Eurozone retail sales 0.3% in March vs 0.1% exp Euro Service PMI 56.4 vs 56.2. German 10Y bund yield + 4bps @0.37%. GOCs slightly lower, lagging the pullback in tsys by ~1bp with the curve unch, GOC 10Y 1.56%. Provis unch after closing 0.5bps tighter yest, Alberta 5Y deal exp.
News headlines
Upbeat Earnings Lift Stocks as Bonds Out of Favor: Markets Wrap (Bloomberg) European stocks rose as earnings reports underscored that the continent’s economy is on the mend. Government bonds extended declines triggered by the Federal Reserve’s policy meeting. Oil fell to the lowest since November.
Oil down on lower than expected drop in U.S. inventories (Reuters) Oil prices fell for the fourth day in a row on Thursday, nearing their lowest level since late March after data showed a lower than expected decline in U.S. inventories. U.S. data showed crude inventories USOILC=ECI fell 930,000 barrels in the week to April 28, against analysts’ expectations for a decrease of 2.3 million barrels. Stocks have steadily declined for the last four weeks, but at 527.8 million barrels they are just 7 million barrels off a record high.
Macron, earnings hopes send European shares to 20-month high (Reuters) Signs that centrist Emmanuel Macron was heading for victory in France’s presidential election and reassuring results from HSBC pushed European shares to a near two-year high on Thursday, despite some wary signals from China and commodity markets.
UK services firms surprise with bounce, homebuyers cautious (Reuters) Britain’s economy picked up some steam in April after slowing in early 2017, a closely-watched survey suggested on Thursday, welcome news for Prime Minister Theresa May ahead of a national election in just over a month’s time.
Metals Extend Sell-Off on Mounting Concerns Over Demand in China (Bloomberg) Metals extended their biggest daily plunge this year, buffeted by signs of ample supplies of copper, and concerns over demand in China. Iron ore tumbled in Dalian, steel plummeted in Shanghai and mining shares slid to the lowest level in four months.
Canadian Natural profit comes in below estimates (TheGlobeAndMail) Canadian Natural Resources is reporting $245-million of net income for the first quarter, a big improvement from the loss it experienced at the same time last year but less than analysts expected. The profit amounted to 22 cents per share for the Calgary-based oil and gas company.
Overnight markets
Overview: US 10yr note futures are down -0.311% at 125-05, S&P 500 futures are up 0.17% at 2387.25, Crude oil futures are down -1.55% at $47.08, Gold futures are down -1.5% at $1229.8, DXY is down -0.07% at 99.141, CAD/USD is down -0.11% at 0.7291.
US Economic Data
| 7:30 AM | Challenger Job Cuts, y/y, Apr, -42.9% (prior -2.0%) |
| 8:30 AM | Trade Balance, Mar, -$43.7b, est. -$44.5b (prior -43.6b, revised -$43.8b) |
| Nonfarm Productivity, 1Q P, -0.6%, est. -0.1% (prior 1.3%, revised 1.8 %) | |
| Unit Labor Cost, 1Q P, 3.0 %, est. 2.7% (prior 1.7%, revised 1.3%) | |
| Initial Jobless Claims, Apr 29, 238k, est. 248k (prior 257k) | |
| Continuing Claims, Apr 22, 1964k, est. 1990k (prior 1988k, revised 1987k) | |
| 9:45 AM | Bloomberg Consumer Comfort Index, Apr 30 (prior 50.8) |
| 10:00 AM | Factory Orders, Mar, est. 0.4% (prior 1.0%) |
| Factory Orders Ex Trans, Mar, (prior 0.4%) | |
| Durables Goods Orders, Mar F, est. 0.7% (prior 0.7%) | |
| Durables Ex Transportation, Mar F, (prior -0.2%) | |
| Cap Goods Orders Nondef Ex Air, Mar F, (prior 0.2%) | |
| Cap Goods Ship Nondef Ex Air, Mar F, (prior 0.4%) |
Canadian Economic Data
| 8:30 AM | Int’l Merchandise Trade, Mar, -0.14b, est. -1.00b (prior -0.97b, revised -1.08b) |
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