Market Update Tsys slightly higher across the curve on very light volume (130k TY fut), 10Y 2.945% (-05bps). Crude above $70 for the first time since Nov 2014 on rising tensions in the middle east, USD index highest since Dec, US equity futures higher (S&P +6.75, Nasdaq +32). Several Fed speakers on tap this week, data focus on April CPI Thurs  (0.3% exp). GOCs higher in line with tsys, provis unch after closing Friday 0.5bps tighter. 

News headlines

A Nafta Deal in May? Negotiators Will Try, But It Won’t Be Easy (Bloomberg) Cabinet-level negotiators from the three Nafta nations meet again in Washington this week to attempt a breakthrough on the trade deal in May. It won’t be easy. Several contentious issues remain unresolved after more than eight months of talks between the U.S., Mexico and Canada to renegotiate the North American Free Trade Agreement. Discussions last took place in late April and will resume Monday, with U.S. Trade Representative Robert Lighthizer expected to host Mexico’s Economy Minister Ildefonso Guajardo and Canadian Foreign Affairs Minister Chrystia Freeland.

Dollar Advances With Stocks; Oil Extends Gain: Markets Wrap (Bloomberg) The dollar resumed its winning ways after a shaky start on Monday, reversing early losses to strengthen. U.S. equity futures and European stocks also climbed following a muted Asian session, and oil extended recent gains to hit another milestone. The Stoxx Europe 600 Index extended Friday’s increase as most national gauges in the region advanced, though trading volumes were lighter than usual thanks to a holiday in the U.K. Contracts for the S&P 500 pointed to the index building on a jump at the end of last week. In Asia, shares climbed in Australia and rallied in Shanghai. The yen fell as Japanese traders returned from holidays, while the euro also weakened. West Texas crude pushed above $70 a barrel for the first time since November 2014 as investors braced for the re-imposition of some U.S. sanctions on Iran. The 10-year Treasury yield ticked higher.

China Softens Tone on Trade After U.S. Leaves Empty Handed (Bloomberg) China tried to strike a positive tone after Donald Trump’s trade negotiators left Beijing Friday with no public sign of an agreement, reiterating that the U.S. shouldn’t make unreasonable demands. State media over the weekend offered a somewhat positive assessment of the U.S. trade talks, urging more negotiations while saying the Americans should be “rational and pragmatic.” And in a move that would meet some U.S. demands, the Commerce Ministry is studying measures to further lower import tariffs on some food, pharmaceuticals and medical instruments, Economic Information Daily reported Monday, citing unidentified people.

Putin Starts New Term as Tensions With West Cloud Economic Hopes (Bloomberg) Vladimir Putin was sworn in for the fourth time as president, promising Russians an “economic and technological breakthrough” in his new six-year term amid the deepest standoff with the West in decades. He’s expected to reappoint his longtime ally Dmitry Medvedev as prime minister as early as Monday in what would be a strong signal of continuity despite a disappointing economic performance.

TSX futures rise on higher crude prices (Reuters) Canada’s main stock index futures rose on Monday, helped by oil prices that touched their highest levels since late-2014 on the back of Venezuela’s deepening economic crisis. June futures on the S&P TSX index SXFc1 were up 0.06 percent at 7:15 a.m. ET. No major economic indicators are scheduled for release. The Toronto Stock Exchange’s S&P/TSX .GSPTSE rose 107.93 points, or 0.69 percent, to 15729.4 on Friday. [nL8N1SB6WL] Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.36 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were up 0.41 percent and Nasdaq 100 e-mini futures NQc1 were up 0.65 percent.

Morneau fires back on Canadian competitiveness warnings (BNN) Federal Finance Minister Bill Morneau is firing back amid a growing chorus of warnings that Canada’s level of competitiveness is eroding. “I will constantly go back to business people and listen to them and say, you need to help me to understand what exactly are the prescriptions to ensure we remain competitive,” Morneau said in an interview with BNN Bloomberg’s Amanda Lang on Friday. “But what I won’t do is accept the frame that we’re not competitive.”

U.S. adds 164,000 positions in April; jobless rate hits 3.9% (BNN) U.S. hiring rebounded in April and the unemployment rate dropped below 4 per cent for the first time since 2000, while wage gains unexpectedly cooled, suggesting the labour market still has slack to absorb. Payrolls rose 164,000 after an upwardly revised 135,000 advance, Labor Department figures showed Friday. The jobless rate fell to 3.9 per cent, the lowest since December 2000, after six months at 4.1 per cent. Average hourly earnings increased 0.1 per cent from the prior month and 2.6 per cent from a year earlier, both less than projected. 

Overnight markets

Overview: US 10yr note futures are down -0.091% at 119-19, S&P 500 futures are up 0.32% at 2671.5, Crude oil futures are up 1.13% at $70.51, Gold futures are down -0.3% at $1310.7, DXY is up 0.41% at 92.944, CAD/USD is up 0.32% at 0.776.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.919% 2 Year 2.505%
5 Year 2.151% 5 Year 2.796%
10 Year 2.333% 10 Year 2.957%
30 Year 2.409% 30 Year 3.126%

US Economic Data

15:00 PM Consumer Credit, Mar est 16.000b (10.601b prior)

Canadian Economic Data

10:00 AM Bloomberg Nanos Confidence, May 4th (57.9 prior)


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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
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