Market Update

US tsys slightly higher before  May Payrolls (175k exp, 3.6% unemp rate), 10Y  2.11%, low volume in Ty futures overnite (257k).  Core Euro bond mixed, gilts lower while bunds slightly higher in the long end – ECB rate guidance to leave rates lower for longer adding momentum to flattener trade.  GOCs unch before  May employment – 5K forecast after April’s blockbuster 107k increase. Wage growth has also been ticking up since Dec, 2.4% in April, back above the 5Y avg 2.2%.

News headlines

Pence says Mexico tariffs still set for Monday as talks continue (BNNBloomberg) Vice President Mike Pence said the U.S. still plans to impose tariffs on Mexico next week, as American and Mexican officials planned further talks aimed at defusing a crisis between the two countries over the flow of undocumented migrants into the U.S. Negotiations wrapped up on Thursday evening without an agreement, Mexican Foreign Minister Marcelo Ebrard said, adding that another round of discussions would take place on Friday in Washington to head off the tariffs.

Trudeau worried China could target imports of other Canadian products (BNNBloomberg) Prime Minister Justin Trudeau says he’s worried China could block imports of other Canadian products — in addition to its recent rejection of canola shipments. Speaking to reporters Thursday in France, Trudeau says he will see if it’s appropriate to have a conversation directly with China’s President Xi Jinping about a number of bilateral difficulties later this month at the G20 summit in Japan. Relations between Canada and China have deteriorated since the December arrest in Vancouver of Huawei senior executive Meng Wanzhou at the behest of the United States.

Mexico pushing forward with ratification of new NAFTA despite Trump tariff threat (FP) Mexico’s ambassador to Canada says his country is pushing forward with the ratification of the new NAFTA despite ongoing threats from U.S. President Donald Trump to slap tariffs on Mexican goods. But Juan Jose Gomez Camacho — just two and a half months into his appointment as Mexico City’s top diplomat in Ottawa — wouldn’t speculate on the deal’s fate if Trump follows through on his pledge to impose the levies by Monday.

Strong U.S. jobs growth expected in May, trade tensions a threat (Reuters) U.S. job growth likely increased solidly in May, with wage gains expected to pick up, showing strength in the labor market before an escalation in trade tensions that analysts have cautioned could pressure an already slowing economy. Futures rise ahead of May jobs report, U.S. stock index futures rose on Friday, as hopes of an interest rate cut by the Federal Reserve continued to buoy sentiment ahead of a highly awaited jobs report.

Beyond Meat sees sales more than doubling in 2019, shares jump 21% (Reuters) Beyond Meat Inc, a maker of plant-based burgers and sausages, said it expects to more than double its revenue and report breakeven EBITDA this year, sending the its shares up over 21 percent. The company said it expects to record revenue of $210 million in 2019, with break-even earnings, before interest, tax, depreciation and amortization (EBITDA). Analysts on average forecast full-year sales of $205 million, and a loss, before interest, tax, depreciation and amortization, of $10.28 million, according to Refinitiv IBES data.

Elliott Management in talks to buy Barnes & Noble (Reuters) Hedge fund Elliott Management Corp is in talks to acquire Barnes & Noble Inc, in a deal that would mark the end of the once-dominant U.S. book retailer as a publicly listed company, a source familiar with the matter said on Thursday.

Markets Overview: US 10yr note futures are up 0.086% at 127-02, S&P 500 futures are up 0.25% at 2853, Crude oil futures are up 1.2% at $53.22, Gold futures are down -0.16% at $1340.5, DXY is up 0.04% at 97.079, CAD/USD is down 0% at 0.7484.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.375% 2 Year 1.872%
5 Year 1.321% 5 Year 1.873%
10 Year 1.45% 10 Year 2.112%
30 Year 1.738% 30 Year 2.603%

US Economic Data

08:30 AM Change in Nonfarm Payrolls, May  Survey: 175k  Prior: 263k
     Change in Private Payrolls, May  Survey: 174k  Prior: 236k
     Change in Manufact. Payrolls, May  Survey: 3k  Prior: 4k
     Unemployment Rate, May  Survey: 3.60%  Prior: 3.60%
     Average Hourly Earnings MoM, May  Survey: 0.30%  Prior: 0.20%
     Average Hourly Earnings YoY, May  Survey: 3.20%  Prior: 3.20%
     Average Weekly Hours All Employees, May  Survey: 34.50  Prior: 34.40
     Labor Force Participation Rate, May  Prior: 62.80%
     Underemployment Rate, May  Prior: 7.30%
10:00 AM Wholesale Trade Sales MoM, Apr  Survey: -0.20%  Prior: 2.30%
     Wholesale Inventories MoM, Apr F  Survey: 0.70%  Prior: 0.70%
03:00 PM Consumer Credit, Apr  Survey: $13.000b  Prior: $10.281b

Canadian Economic Data

08:30 AM Net Change in Employment, May  Survey: 5.0k  Prior: 106.5k
     Unemployment Rate, May  Survey: 5.70%  Prior: 5.70%
     Participation Rate, May  Survey: 65.80%  Prior: 65.9%
     Full Time Employment Change, May  Survey: 9.00%  Prior: 7.3%
     Part Time Employment Change, May  Survey: 50.00%   Prior: 33.60%
     Capacity Utilization Rate, 1Q  Survey: 81.00%   Prior: 81.70%

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