Market Update Tsys trading lower on avg volume (~290k TY1), 10Y 2.96% (+1.3bps), curve unch. Slight risk off with S&P futures -2.75, USD index higher. No data today but busy week ahead in terms of event risk including CPI, FOMC/ECB and $68bln in 3,10 & 30Y tsy supply, $4bln more than in April. Core EGBs lower, 10Y bund +3bps @ 0.48% on sharp rally in Italy BTPs after new Fin Min said there were no discussions to leave the euro. GOCs higher, outperforming tsys 1-2bps, notable move in the CAD above 1.30 after this weekend’s G7 and Trump’s spat with Trudeau and the potential impact of a trade war on Cda exports.
News headlines
Trump Shocks Leaders With Trudeau Insult to Upend G-7 Summit (Bloomberg) President Donald Trump broadsided his allies and upended a Group of Seven meeting just as it wound up — disavowing a joint statement the U.S. had agreed to, lashing out at Canada’s Justin Trudeau and ratcheting up trade tensions. Trump fired off a pair of tweets several hours after leaving the summit in Canada to fly to Singapore for another on North Korea. Trudeau and other leaders had given closing press conferences and announced a U.S.-backed joint G-7 statement. Minutes after that statement was published online, Trump complained about comments made by Trudeau and revoked his support.
Canadian Dollar Hit Hardest as Trade Woes Resurface: Inside G-10 (Bloomberg) The Canadian dollar fell against all its major peers after U.S. President Donald Trump revoked his support for a joint Group-of-Seven statement and criticized his neighboring leader Justin Trudeau. The U.S. dollar was steady as investors awaited a series of major risk events this week, including a summit between Trump and North Korean leader Kim Jong Un in Singapore on Tuesday and meetings of the world’s three-biggest central banks on following days. The Japanese yen halted a two-day winning streak.
Fed to Stick With Gradual Hiking as Risks Balance Out: Survey (Bloomberg) The Federal Reserve won’t steepen the path of interest-rate increases this year in the face of accelerating U.S. growth, according to economists surveyed by Bloomberg. In a poll conducted June 5-7, the proportion of respondents who expect at least three additional rate hikes in 2018 dropped slightly, compared with the survey in March. The median estimate from economists now sees two more increases this year, which matches the Fed’s own projections back in March.
U.S. Stock Futures Steady in Busy Week; Pound Dips: Markets Wrap (Bloomberg) U.S. equity-index futures drifted while European stocks rose with most Asian shares as investors braced for one of the busiest weeks of the year, during which three major central banks set interest rates, President Donald Trump meets North Korea’s leader and Brexit returns to the fore. The mood was cautiously risk-on, with the Stoxx Europe 600 Index rising for the first time in five days as contracts for the S&P 500 traded little changed and Treasuries fell with core European bonds. Earlier in Asia, shares in Japan, Hong Kong and South Korea showed modest advances while Chinese stocks underperformed. Australian markets were shut for a holiday.
‘Fair trade, fool trade’, Trump’s tweets spew ire on NATO allies, Trudeau (Reuters) U.S. President Donald Trump fired off a volley of tweets on Monday venting anger on NATO allies, the European Union and Canadian Prime Minister Justin Trudeau in the wake of a divisive G7 meeting over the weekend. The escalating clash over trade between Washington and some of its closest global partners cast a cloud over Trump’s efforts to make history in nuclear talks in Singapore on Tuesday with Kim Jong Un of North Korea, one of America’s bitterest foes.
Bombardier JV wins $4.9 billion Los Angeles Airport contract (Reuters) Bombardier Inc (BBDb.TO) and its partners have been awarded a $4.9 billion contract to build and operate a passenger transit system at the Los Angeles International Airport, the company said on Monday. The Canadian plane and train maker has a 10 percent stake in the venture, which also includes Balfour Beatty, ACS Infrastructure and Fluor Enterprises. In the overall contract, Bombardier was awarded a $219 million order to design and build the system, including the supply of 44 of its INNOVIA automated vehicle systems, the company said here.
Reviving Energy East pipeline could hit Putin in Europe: MacKay (BNN) Of all the reasons raised in recent days in favour of resurrecting the Energy East pipeline, Peter MacKay believes a big one has been overlooked: curtailing Russian influence in Europe. “[Russian President] Vladimir Putin would hate having to compete with clean, ethical, Canadian oil and gas,” the former Foreign Affairs Minister told BNN Bloomberg, referring to TransCanada’s now-defunct $15.7-billion plan to ship over a million barrels per day from northern Alberta to Canada’s Atlantic coast.
Lacavera’s firm buys TD’s private credit card business for $250M (BNN) After shaking up the Canadian wireless industry a decade ago by launching Wind Mobile, entrepreneur Anthony Lacavera is taking another shot at disrupting the tech industry. Financial technology company Flexiti Financial will announce Thursday it is acquiring Toronto-Dominion Bank’s () Canadian private label credit card portfolio for $250 million, Lacavera told BNN Bloomberg. Flexiti was founded in 2013 and is controlled by Globalive Capital Inc., the investment company founded and chaired by Lacavera. The fintech firm facilitates loans for retailers seeking to offer customers better financing terms on big-ticket items such as furniture or jewelry.
Overnight markets
Overview: US 10yr note futures are down -0.144% at 119-14, S&P 500 futures are down -0.09% at 2780, Crude oil futures are down -1.05% at $65.05, Gold futures are down -0.13% at $1301, DXY is up 0.13% at 93.653, CAD/USD is up 0.18% at 0.7677.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.907% | 2 Year | 2.512% |
| 5 Year | 2.148% | 5 Year | 2.797% |
| 10 Year | 2.307% | 10 Year | 2.959% |
| 30 Year | 2.359% | 30 Year | 3.097% |
US Economic Data
There is no US economic data for today.
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, Jun 8th (57.5 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
Fax: (514)-861-3230