Market Update
Tsy yields ~1bp lower, 10Y 2.115%, average volume in TY futures (350k) with equity futures +0.30%, crude 3.6% on suspected attack on two oil tankers in Gulf of Oman. Core Euro bond higher led by UK gilts, yields now ~3bps lower on the day, while bunds lack direction with the 10Y bund 0.245%. Focus in the US on May import prices and $16bln 30Y bond auction at 1:00ET. GOCs higher in line with tsys 10Y 1.48%. GOC 5s30s curve 13bps flatter since month end, while the US is 14bps steeper, the 5s30s box is -36bps or -2.3 stds rich on a five year basis (GOC curve relatively flat), long outperformance on the GOC curve noteworthy. CMB 5Y pricing today in the area of 33.5bps. CIBC 10NC5 NVCC issue yest @ 155 now 153/150. MCAP issued $100mln 5s @ 275 or 50bps vs MCAP 22s. Needless to say this ‘yieldy’ paper did well on the brak comign in ~10bps.
News headlines
Brexiteer Boris Johnson far ahead in first round of contest to replace UK PM (Reuters) Boris Johnson, who has pledged to deliver Brexit on Oct. 31, edged closer to power on Thursday when he won by far the most support from Conservative Party lawmakers in the first round of the contest to replace Prime Minister Theresa May.
Oil surges after Gulf tanker attacks, stocks claw higher (Reuters) Suspected attacks on two tankers off the coast of Iran saw oil markets erupt out of their recent slump on Thursday and kept traders gobbling up ultra-safe government bonds, gold and the Japanese yen. Oil tanker attacks in Gulf of Oman fuel security, oil supply fears.
China says won’t yield to any U.S. pressure over trade (Reuters) China’s commerce ministry said on Thursday Beijing will not yield to any “maximum pressure” from Washington, and any attempt by the United States to force China into accepting a trade deal will fail.
Chinese vice premier urges more support for economy amid trade war (Reuters) Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure.
Majority of Canada’s exporters see global recession, EDC finds (BNNBloomberg) Canadian exporters are reporting widespread concerns about a global recession, with sentiment in the sector falling to the lowest level in seven years, according to a survey by the country’s export financing agency. Export Development Canada’s trade confidence index, a composite gauge based on a bi-annual survey of 1,000 businesses, dropped to 69.8, compared with 73.7 at the end of last year. It’s the lowest reading since 2011 and the second lowest since the last recession a decade ago.
Market Overview: US 10yr note futures are up 0.135% at 127-05, S&P 500 futures are up 0.23% at 2891.5, Crude oil futures are up 4.18% at $53.28, Gold futures are up 0.21% at $1339.6, DXY is down -0.05% at 96.95, CAD/USD is down -0.28% at 0.7515.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.435% | 2 Year | 1.868% |
| 5 Year | 1.379% | 5 Year | 1.858% |
| 10 Year | 1.483% | 10 Year | 2.108% |
| 30 Year | 1.742% | 30 Year | 2.606% |
US Economic Data
| 08:30 AM | Import Price Index MoM, May Survey: -0.20% Prior: 0.20% |
| Export Price Index MoM, May Survey: -0.20% Prior: 0.20% | |
| Initial Jobless Claims, 39600 Survey: 215k Prior: 218k | |
| Continuing Claims, 37043 Survey: 1660k Prior: 1682k | |
| 09:45 AM | Bloomberg Consumer Comfort, 39965 Prior: 6170.00% |
Canadian Economic Data
| 08:30 AM | New Housing Price Index MoM, Apr Survey: 0.00% Prior: 0.00% |
| New Housing Price Index YoY, Apr Survey: 0.10% Prior: 0.10% |
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