Market Update Tsys are trading lower, yields ~1bp higher across the curve on avg volume in TY futures (257k), risk-on tone as equities rise, Trump dialing back imminent threat of strike on Syria in latest tweet. Core EGBS mixed -German bonds lower into NY trading with tsys on risk-on – despite lower EU ind production data, as well as ECB minutes expressing concerns over trade disputes. GOCs lower , in line with tsys, provi spds continue to narrow as tone in equities improve.
News headlines
Trump Discussed Firing Rosenstein But Denies Bid to Oust Mueller (Bloomberg) Former strategist also advocates use of executive privilege President Donald Trump discussed firing Deputy Attorney General Rod Rosenstein with White House aides on Wednesday, a person familiar with the matter said, as a chorus of Trump’s advisers and allies urged him to thwart the investigation of Russian interference in the 2016 election.
Trump Meets Mattis as He Weighs Military Action in Syria (Bloomberg) President Donald Trump is still weighing options for U.S. military action against Syria and met with Defense Secretary Jim Mattis on Wednesday, after warning Russia on Twitter to expect a missile barrage. Trump has not yet settled on a plan to retaliate against Syrian President Bashar al-Assad for an alleged chemical weapons attack last weekend outside Damascus, and a U.S. strike isn’t expected Wednesday, two people familiar with the matter said.
Fed Sees GDP Hit From Trade War Outweighing Fleeting Inflation (Bloomberg) A trade war would leave the U.S. Federal Reserve having to decide between battling weaker economic growth or rising prices. Which one it focuses on already looks pretty clear. President Donald Trump’s administration has proposed tariffs on imported steel and aluminum, from which a number of U.S. allies would be exempt, and has threatened to slap additional measures on as much as $150 billion of Chinese goods. Higher and broader tariffs would raise the prices of those imports, potentially fanning U.S. inflation, while reducing economic activity by sapping confidence and tightening financial conditions.
China Says It Has a Detailed Plan to Hit Back at U.S. on Tariffs (Bloomberg) China will “unquestionably” retaliate if the U.S. further escalates trade tension, and authorities have prepared a detailed, comprehensive counter-punch plan, a senior trade official said. The government hasn’t conducted any negotiations at any level with American counterparts recently, Commerce Ministry Spokesman Gao Feng said Thursday at a press conference in Beijing. “We can’t talk under the unilateral threat from the U.S.,” he said.
Canada’s Trudeau to press British Columbia to accept pipeline (Reuters) Canadian Prime Minister Justin Trudeau is set to pile pressure on British Columbia’s provincial government to drop its resistance to a pipeline project, but will try to avoid tougher measures that might alienate voters who helped his Liberals win power, a source close to the matter said on Wednesday.
TSX futures rise as Syria tensions ease (Reuters) Futures for Canada’s main index were higher on Thursday as investor worries over a swift American military action in Syria eased following U.S. President Donald Trump’s latest comments. U.S. President Donald Trump amended on Thursday an earlier warning of a quick military strike against Syria in retaliation for a suspected chemical weapons attack on civilians, saying it “could be very soon or not so soon at all”.
NAFTA deal ‘not close at all’: Unifor’s Dias (BNN) Talk of an impending NAFTA deal is premature, Canadian union leader Jerry Dias said in Washington while officials were negotiating there Wednesday. The Unifor boss said he’s been in contact with the Canadian negotiating team and said speculation from some about an imminent agreement in principle is divorced from reality. The United States has been increasingly anxious to get something announced this month, before it becomes impossible for the rest of this year because of elections in Mexico and the U.S. Congress.
Overnight markets
Overview: US 10yr note futures are down -0.013% at 120-27, S&P 500 futures are up 0.51% at 2654.5, Crude oil futures are down -0.61% at $66.41, Gold futures are down -0.78% at $1349.4, DXY is up 0.25% at 89.796, CAD/USD is up 0.11% at 0.7941.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.86% | 2 Year | 2.319% |
| 5 Year | 2.079% | 5 Year | 2.622% |
| 10 Year | 2.212% | 10 Year | 2.79% |
| 30 Year | 2.332% | 30 Year | 3.006% |
US Economic Data
| 8:30 AM | Initial Jobless Claims, Apr 7th 233k est 230k (242k prior) |
| Continuing Claims, Mar 31st 1871k est 1843k (1808k prior) | |
| Import Price Index MoM, Mar 0.0% est 0.1% (0.4% prior) | |
| Import Price Index ex Petroleum MoM, Mar 0.1% est 0.2% (0.5% prior) | |
| Import Price Index YoY, Mar 3.6% est 3.8% (3.5% prior) | |
| Export Price Index MoM, Mar 0.3% est 0.2% (0.2% prior) | |
| Export Price Index YoY, Mar 3.4% (3.3% prior) | |
| 8:45 AM | Bloomberg April United States Economic Survey |
| 9:45 AM | Bloomberg Consumer Comfort, Apr 8th (57.2 prior) |
Canadian Economic Data
| 8:30 AM | Teranet/National Bank HP Index, Mar 218.96 (218.90 prior) |
| Teranet/National Bank HPI MoM, Mar 0.0% (-0.1% prior) | |
| Teranet/National Bank HPI YoY, Mar 6.6% (7.5% prior) | |
| New Housing Price Index MoM, Feb -0.2% est 0.1% (0.0% prior) | |
| New Housing Price Index YoY, Feb 2.6% est 3.0% (3.2% 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