Market Update

Tsys lower, yields ~1bp higher , 10Y 2.154%, on avg. volume in TY futures (240k). European stocks are higher, S&P futures up 1.25, crude off 0.64% after API data  showed a rise in gas supplies and after yesterday’s sharp rally.  DOE crude inventories due at 10:00am. EGBs also lower, peripheral yields 2-3bps higher before ECB meeting tomorrow.  In FX, the euro is off 0.43% as the ECB is preparing to cut its outlook for inflation according to a BB story, thou it is still expected to change its forward guidance  in view of the improved eco outlook. GOCs slightly lower, 10Y 1.40%, provis opening unchanged.

News headlines 

Haven Flight Ebbs as ECB Spurs Stocks, Sinks Euro: Markets Wrap (Bloomberg) Markets appeared to shrug off the risks surrounding a series of key events this week, as the threat of a more-hawkish ECB receded and boosted stocks, while a troubled Spanish bank was rescued.

Oil dips on concerns about rising U.S. output, OPEC tensions (Reuters) Oil prices dipped on Wednesday on renewed concerns about the efficacy of OPEC-led production cuts due to rising tensions within the export group over Qatar and growing U.S. output.

Global growth headed for six-year high: OECD (Reuters) The global economy is on course this year for its fastest growth in six years as a rebound in trade helps offset a weaker outlook in the United States, the OECD forecast on Wednesday. The global economy is set to grow 3.5 percent this year before nudging up to 3.6 percent in 2018, the Paris-based Organisation for Economic Cooperation and Development said, updating its forecasts in its latest Economic Outlook.

Pound Is Seen Losing the Most If U.K. Vote Delivers No Winner (Bloomberg) The pound could plunge to as low as $1.20 on Friday, a level last seen in January, should the U.K. snap election lead to a hung parliament, according to a Bloomberg poll of analysts.

After oilsands divestments, Shell Canada refocuses on gas, chemicals and renewables (Bloomberg) Shell Canada Ltd. will soon announce a project to turn vegetable products into diesel fuel in Alberta, as part of the company’s transition to produce less oil and more energy from natural gas, renewables and chemicals.

Dollarama profit climbs 13.9 per cent (TheGlobeAndMail) Canadian dollar-store operator Dollarama Inc reported a 13.9 per cent increase in quarterly profit on Wednesday as customers on average spent more at its stores. The Montreal-based company’s net income rose to $94.7-million or 82 cents per share in the first quarter ended April 30, from $83.2-million or 68 cents per share, a year earlier.

Overnight markets 

Overview: US 10yr note futures are down 0% at 126-25, S&P 500 futures are up 0.03% at 2431.5, Crude oil futures are down -1.1% at $47.66, Gold futures are down -0.25% at $1294.3, DXY is up 0.2% at 96.825, CAD/USD is down -0.01% at 0.7433.

US Economic Data

7:00 AM MBA Mortgage Applications, Jun 2, 7.1% (prior -3.4%)
15:00 AM Consumer Credit, Apr, est. $15.000b (prior $16.431b)

Canadian Economic Data

8:30 AM Building Permits, m/m, Apr, -0.2%, est. 3.0% (prior -5.8%, revised -4.9%)


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