Market Update
Tsys opening higher& flatter, yields 1.5 – 4.0 bps lower, US 10Y 2.142% on safe haven bid with EGBs. Euro stocks lower along with crude, gold approaching April highs @ 1295, USD . Risk off mood in front of Thursday’s Comey testimony, ECB & UK election supporting sharp rise in gilts, bunds higher, 10Y gilt below 1.0% for the first time since Oct , 0.98%. China is ready to buy more tsys according to BB story as yields said to be more attractive vs other sov debt. GOCs higher, lagging the rally in tsys by ~1bp, 2s10s flattest since Nov. Provis closed yest 0.5bps wider, long Ont, PQs well bid on screens – this morn spds unch. NVCC debt rallying 5-10 bps yest on decision by FTSE TMX to include bonds in index as of July 1st.
News headlines
Havens Rally as Risk Events Stack Up; Oil Swings: Markets Wrap (Bloomberg) Caution reigned across markets in a week loaded with risk events, from former FBI chief James Comey’s congressional testimony to the ECB’s policy meeting and Britain’s increasingly uncertain election. Havens including gold, the yen and Treasuries gained while stocks retreated.
U.K. stocks slip as polls turn up election nerves (MarketWatch) U.K. stocks declined for a second straight day on Tuesday, as investors remained cautious ahead of the U.K. general election on Thursday, as polls point to an increasingly tight race. The FTSE 100 index UKX, -0.22% fell 0.2% to 7,510.19, building on a 0.3% loss from Monday.
Oil slips on worries Mideast rift could undermine OPEC cuts (Reuters) Oil prices slipped further below $50 a barrel on Tuesday on concerns that a diplomatic rift between Qatar and several Arab states including Saudi Arabia could undermine efforts by OPEC to tighten the market.
UK must speak up to preserve global markets role after Brexit: ICE CEO (Reuters) Britain must show its support for markets with measures such as keeping taxes low if it wants to remain a top global financial center after Brexit, Intercontinental Exchange (ICE.N) Chairman and Chief Executive Jeff Sprecher said on Tuesday.
Rob Merrifield: Politicians killed Canada’s low-dollar advantage by piling on carbon taxes and environmental red tape (FinancialPost) A lot of talk on trade relations between Canada and the United States risks missing the forest for the trees. Understandably, the NAFTA renegotiation is top of mind for folks in trade circles and within these discussions we easily end up focusing on specific trade irritants such as supply management, softwood lumber, wheat grading, rules of origin, and more.
Shareholders to settle GM’s fight with activist investor (TheGlobeAndMail) General Motors’ normally tranquil annual meeting could be a contentious affair this year, as an activist investor targets GM’s stagnant stock price. The nation’s No. 1 auto maker has posted more than $42-billion in profits over the past seven years. Yet the stock has stubbornly hovered near its $33 initial offering price from November 2010.
Overnight markets
Overview: US 10yr note futures are up 0.272% at 126-26, S&P 500 futures are down -0.25% at 2428.5, Crude oil futures are down -0.44% at $47.19, Gold futures are up 0.95% at $1294.9, DXY is down -0.08% at 96.726, CAD/USD is down -0.01% at 0.7423.
US Economic Data
| 10:00 AM | JOLTS Job Openings, Apr, est. 5750 (prior 5743) |
Canadian Economic Data
| 10:00 AM | Ivey Purchasing Managers Index, May, (prior 62.4) |
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