Market Update

US tsys trading lower, yields 2-2.5bps higher for a second day, stocks higher in Europe led by car makers, Shanghai Comp +2.5%. Core Euro bonds mixed, UK gilts weaker from the start -UK employment rose 3.8% in April the largest one month rise since May 2008 with unemployment rate unch at record low 3.8% below the BOE’s 3.9% forecast.  GOCs lower in line with tsys, 10Y 1.54%. In the US May PPI expected to have risen 0.1% bringing the y/y rate back to 2.0% from 2.2% in April. The US auctions $38bln in 3 year notes at 1:00ET.

News headlines

Under pressure, Fed faces an outlook clouded by trade wars and signs of weakness (Reuters) U.S. President Donald Trump’s attacks on the Federal Reserve have broken one set of precedents, his talk of stacking the central bank with political allies has strained another, and his on-again off-again tariff threats have made the economic outlook harder than ever to predict.

Battered Beyond Meat bears are grappling with an ‘extraordinarily rare’ situation where it’s more expensive to short the stock than own it (BI) Not everyone is happy with Beyond Meat’s soaring stock price. Short-sellers, or traders who have bet against the best-performing initial public offering of the year, have lost hundreds of millions of dollars as the stock has climbed to more than 600% of its initial IPO price of $25 a share.

Canaccord to buy Australian securities business Patersons for $23M (BNN) Canaccord Genuity Group Inc. has struck a deal to acquire Australian financial services firm Patersons Securities Ltd. for roughly $23 million in cash. The Melbourne-based securities business has operations in wealth management and capital markets. Canaccord chief executive Dan Daviau says the addition of Patersons is part of its strategy to increase the scale of its wealth management operations and improve its business mix in Australia.

SNC-Lavalin names interim CEO as Neil Bruce steps aside (BNN) The chief executive officer of SNC-Lavalin Group Inc. is leaving the embattled engineering and construction giant. Neil Bruce is stepping aside, effective immediately, and will return to his family in the United Kingdom, SNC announced Tuesday morning. He’s being replaced on an interim basis by Chief Operating Officer Ian Edwards, who has been tasked with a full review of the company’s strategic direction.

Exclusive: Top Japanese chip gear firm to honor U.S. blacklist of Chinese firms – executive (Reuters) Japan’s Tokyo Electron, the world’s No.3 supplier of semiconductor manufacturing equipment, will not supply to Chinese clients blacklisted by Washington, a senior company executive told Reuters.

World shares rally again on Trump tariff relief, Fed hopes (Reuters) World shares rallied on Tuesday to hold near one-month highs, with German carmakers outperforming and Wall Street looking to extend gains after the United States stepped back from imposing tariffs on Mexico.

UK April pay data beats forecasts, employment growth slow (Reuters) British wages in the three months to April grew faster than expected and hiring slowed less sharply, as the jobless rate held at its lowest rate since 1975, official figures showed on Tuesday.

Market Overview: US 10yr note futures are down -0.123% at 126-19, S&P 500 futures are up 0.52% at 2904.25, Crude oil futures are up 1.13% at $53.86, Gold futures are down -0.3% at $1325.3, DXY is up 0.02% at 96.777, CAD/USD is down -0.07% at 0.7542.

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.485% 2 Year 1.922%
5 Year 1.433% 5 Year 1.929%
10 Year 1.54% 10 Year 2.164%
30 Year 1.786% 30 Year 2.646%

US Economic Data

06:00 AM NFIB Small Business Optimism, May  Survey: 102.00  Actual: 105.00 Prior: 103.50
08:30 AM PPI Final Demand MoM, May  Survey: 0.10%  Prior: 0.20%
      PPI Ex Food and Energy MoM, May  Survey: 0.20%  Prior: 0.10%
     PPI Final Demand YoY, May  Survey: 2.00%  Prior: 2.20%
     PPI Ex Food and Energy YoY, May  Survey: 2.30%  Prior: 2.40%

Canadian Economic Data

There is no CDA economic data for today. c

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