Market Update
US tsys under pressure, yields 2-2.5bps higher, 10Y 2.57% , moderate volume in TY futures (350k), equities near top of overnight range (S&P fut +10). BOA Q1 eps beat est $0.70 vs $0.66, with record quarterly earnings $7.3bln. Walmart announced a benchmark (~$1bln) USD 5,7 & 10Y deal. Core EGBs little changed, UK gilts flat after Feb employment rose 179k close to exp, while EU summit chair Tusk said he “dreams” of the UK remaining in the EU but admits he has few allies who want to reverse Brexit. GOCs lower in line with tsys, Can/US ~2bps tighter after since yesterday’s weaker BOC outlook survey. March CPI tomorrow, expecting another strong m/m increase (0.7%) with gas prices up 11% last month and strong seasonals. If that is the case the gentle rally in breakevens since year end could gain some traction, particularly short dated RRB 21s & 26s due to higher carry profile.
News headlines
Stocks Gain as Earnings Lift Outlook; Bonds Steady: Markets Wrap (Bloomberg) Stocks advanced globally on Tuesday as investors showed confidence the equity rally will find fresh support from the deluge of corporate earnings due this week. The dollar strengthened while Treasuries were steady.
Futures rise tracking global markets (Reuters) Futures for Canada’s main stock index inched higher on Tuesday, after stock markets around the world gained on reduced volatility.
Trump on China trade spat: ‘We’re going to win either way’ (Reuters) President Donald Trump said on Monday he believed the United States would emerge from its trade dispute with China as a winner, no matter what happened.
Loonie falls as business sentiment softens on slowing economy (BNN) Canada’s recent economic slowdown and global trade tensions are hitting businesses confidence, according to a Bank of Canada survey.
EU says it is ready to launch U.S. trade talks, but without agriculture (Reuters) The European Union is ready to start talks on a trade agreement with the United States and aims to conclude a deal before year-end, European Trade Commissioner Cecilia Malmstrom said on Monday.
China’s policy stimulus may worsen economic distortions: OECD (Reuters) China’s stimulus measures will shore up economic growth this year and next but may undermine the country’s drive to control debt and worsen structural distortions over the medium term, the OECD said in a report on Tuesday.
Canada’s oil heartland heads to polls with carbon taxes at risk (BNN) Voters in the Canadian province of Alberta, home to the world’s third-largest oil reserves, head to the voting booth today in a divisive election that could have wide-ranging implications for the country’s environmental policy and global energy markets.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.612% | 2 Year | 2.398% |
| 5 Year | 1.618% | 5 Year | 2.384% |
| 10 Year | 1.756% | 10 Year | 2.567% |
| 30 Year | 2.059% | 30 Year | 2.981% |
US Economic Data
| 09:15 AM | Industrial Production MoM, Mar Survey 0.20% Prior 0.10% |
| Capacity Utilization, Mar Survey 79.20% Prior 78.20% | |
| 10:00 AM | NAHB Housing Market Index, Apr Survey 63 Prior 62 |
Canadian Economic Data
| 08:30 AM | Int’l Securities Transactions, Feb Survey — Prior 28.40b |
| Manufacturing Sales MoM, Feb Survey -0.10% Prior 1.00% |
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