Market Update
US tsys lower ahead of March nonfarm payrolls, US 10Y 2.535% (+2bps). US equity futures slightly higher (S&P +2.75), crude unch at $62, up for a fifth straight week. Median estimate is for 177k increase in payrolls after a 20k rise in Feb, with the unemployment rate unch at 3.8% and AHE +0.3%/3.4% y/y. UK gilts have sold off and the curve is steeper, yields 3-5bps higher after PM May asked the EU to delay Brexit until June 30th. GOCs unch before March Employment – 6k exp after huge 56k increase in Feb, Jan-Feb were the strongest two-month increases to start the year since 1981. The BOC announced details of next week’s two year auction – reopening the May 2021 issue for $3bln ($9bln outstanding) , the current May21/2Y roll -0.3/-0.6. , 2s5s is 1bp inverted.
News headlines
Stocks Edge Higher With Bond Yields on Trade Hopes: Markets Wrap (Bloomberg) Global stocks edged higher while Treasuries slipped following remarks from both China and the U.S. that progress was being made in trade talks. The dollar rose hours before Friday’s report on the American job market.
TSX futures little changed ahead of employment data (Reuters) Stock futures for Canada’s main stock index were flat on Friday, ahead of keenly awaited employment reports from the United States and Canada.
U.S. job growth seen accelerating from 17-month trough (Reuters) U.S. employment growth likely rebounded from a 17-month low in March as milder weather boosted activity in sectors like construction, which could further allay fears of a sharp slowdown in economic growth in the first quarter.
Trump says U.S.-China trade deal may be reached in four weeks (Reuters) U.S. President Donald Trump said on Thursday the United States and China were close to a trade deal that could be announced within four weeks, while warning Beijing that it would be difficult to allow trade to continue without a pact.
Oil in Longest Run of Weekly Gains Since 2017 on Tight Supply (Bloomberg) Oil in New York headed for the longest weekly winning streak since November 2017 as crises from Venezuela to Libya threatened supplies, while optimism over U.S.-China trade talks buoyed the outlook for demand.
Trade optimism supports dollar ahead of U.S. jobs report (Reuters) Optimism for a U.S.-China trade deal helped the dollar hit a three-week high against the yen on Friday, although moves in broader foreign exchange markets were limited as investors saw a lot of headlines but no conclusions out of the trade talks.
Venezuela Blackouts Cut Oil Output by Half During March (Bloomberg) Power failures that plunged Venezuela into darkness for much of March also briefly slashed the country’s crude production by half, according to people familiar with the situation.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.591% | 2 Year | 2.358% |
| 5 Year | 1.582% | 5 Year | 2.342% |
| 10 Year | 1.714% | 10 Year | 2.537% |
| 30 Year | 1.985% | 30 Year | 2.943% |
US Economic Data
| 8:30 AM | Change in Nonfarm Payrolls, Mar Surv 177k Prior 20k |
| Change in Manufact. Payrolls, Mar Surv 10k Prior 4k | |
| Unemployment Rate, Mar Surv 3.8% Prior 3.8% | |
| Average Hourly Earnings MoM, Mar Surv 0.3% Prior 0.4% | |
| Average Hourly Earnings YoY, Mar Surv 3.4% Prior 3.4% |
Canadian Economic Data
| 8:30 AM | Net Change in Employment, Mar Surv 6.0k Prior 55.9k |
| Unemployment Rate, Mar Surv 5.8% Prior 5.8% | |
| Hourly Wage Rate Permanent Employees YoY, Mar Surv 2.2% Prior 2.2% | |
| Participation Rate, Mar Surv 65.7 Prior 65.8 |
Disclosure and Disclaimer
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