Market Update

US tsys slightly lower, near top of narrow range overnite, 10Y 2.445%, heavy volume in TY futures (670k), US/China trade and Trump tweets making headlines with the US raising tariffs on $200bln in Chinese goods and the Chinese threatening to retailiate.  US April CPI forecast to have risen 0.4% , unch from March with the y/y moving up to 2.1% from 1.9%, the main culprit being another solid  monthly increase in retail gas prices (10% in April). Also multiple Fed speakers – Bostic, Brainard and Williams.  GOCs slightly wider vs tsys before April Employment –  11.6k exp vs -7.2k in March., with the unemployment rate unch at 5.8%.

News headlines

Trump Ends China Trade Truce as Both Sides Plan More Tariffs (Bloomberg) President Donald Trump boosted tariffs Friday on $200 billion in goods from China and was preparing more in his most dramatic steps yet to extract trade concessions, saying there’s “no need to rush” a deal even though the uncertainty is roiling markets and clouding the global economy.

U.S. Stock Futures Decline as Europe, Asia Rebound: Markets Wrap (Bloomberg) U.S. equity futures dropped on Friday, bucking a rebound in stocks from Europe to Asia as investors scrambled to gauge the outlook for the latest round of trade talks.

Oil Shrugs Off U.S. Tariff Hike to Climb on Tighter Supply (Bloomberg) Oil pushed higher even after the U.S. went ahead with a planned tariff increase on Chinese goods, as rising tensions in Iran and elsewhere kept the supply outlook tight.

U.S. escalates trade war amid negotiations, China says will hit back (Reuters) The United States escalated a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal.

Pre-Brexit rush by factories boosts UK economy in early 2019 (Reuters) Britain’s economy got a sharp one-off boost in the first three months of 2019, official figures showed on Friday, as manufacturers rushed to deliver orders before a Brexit that never came.

EU commissioner says agriculture not on agenda for U.S. talks (Reuters) The European Union intends to keep agriculture off the agenda in its trade talks with the United States and continues to support rules-based, open and predictable international commerce, the EU’s agriculture commissioner said on Friday.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.587% 2 Year 2.254%
5 Year 1.56% 5 Year 2.24%
10 Year 1.686% 10 Year 2.446%
30 Year 1.932% 30 Year 2.873%

US Economic Data

08:30 AM CPI MoM, Apr Survey 0.40% Actual: 0.3% Prior 0.40%
     CPI Ex Food and Energy MoM, Apr Survey 0.20% Actual: 0.1% Prior 0.10%
     CPI YoY, Apr Survey 2.10% Actual: 2.0% Prior 1.90%
     CPI Ex Food and Energy YoY, Apr Survey 2.10% Actual: 2.1% Prior 2.00%
     CPI Core Index SA, Apr Survey 261.884 Actual: 261.735 Prior 261.374
     CPI Index NSA, Apr Survey 255.800 Actual: 255.548 Prior 254.202
02:00 PM Monthly Budget Statement, Apr Survey $160.5b Prior $214.3b

Canadian Economic Data

08:30 AM Building Permits MoM, Mar Survey 2.40% Actual: 2.1% Prior -5.70%
     Net Change in Employment, Apr Survey 11.6k Actual: 106.5k Prior -7.2k
     Unemployment Rate, Apr Survey 5.80% Actual:  5.7%  Prior 5.80%
     Participation Rate, Apr Survey 65.7 Actual: 65.9  Prior 65.7
     Full Time Employment Change, Apr Survey — Actual: 73  Prior -6.4
     Part Time Employment Change, Apr Survey — Actual: 33.6  Prior -0.9

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, 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