Market Update

Tsys lower since Asia and European session, following better than expected China Q1 GDP data, US 10Y 2.60%, heavy volume in TY futures (545k) with prices hitting the lowest since March 19th . US equity futures higher, S&P +7, crude 64.40 (+0.35). Core EGBs lower despite softer UK CPI and continued declines in pace of House price growth in Feb (0.65 vs 1.2% exp). GOCs lower before CPI, 0.5bps vs tsys, 10Y 1.80% highest in five weeks.  March CPI expected to see a second straight 0.7% increase, with upside risk due to gasoline and seasonal increases in apparel, travel, … Ten year auction at noon – $3.3bln reopening of the 2.25% June 2029s , size is 10% larger than last auction in Jan with yields ~20bps lower.  The 29/28 roll tigther this week , 2.0/1.9  versus 3 month low 1.7bps.

News headlines

China’s first-quarter growth unexpectedly steadies, but too early to call clear recovery (Reuters) China’s economy grew at a steady 6.4 percent pace in the first quarter, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.

Stocks Edge Up as China Optimism Boosts Sentiment: Markets Wrap (Bloomberg) Stocks mostly edged higher on Wednesday as improving prospects for the world’s second-biggest economy helped lift investor sentiment as the earnings season rumbled on. Bond fell and the dollar nudged lower.

Futures up on higher oil; inflation, trade data in focus (Reuters) Futures for Canada’s main stock index were higher on Wednesday, boosted by gains in oil prices, ahead of inflation and trade balance data.

China’s Strengthening Economy Bolsters Its Hand in Trump Trade Talks (Bloomberg) China’s economy rebounded through the first quarter, a welcome sign of stabilization for the world and handing the government room for maneuver as trade negotiations with the U.S. enter a crucial stage.

Oil hits 2019 high above $72 on China growth, lower U.S. inventories (Reuters) Brent oil hit a 2019 high above $72 a barrel on Wednesday, propelled by steady economic growth in China and a fall in U.S. crude stocks which defied expectations and signaled firm demand, while global supply remained tight.

U.S. firms no longer ‘positive anchor’ for Beijing ties: AmCham in China (Reuters) Frustrated U.S. businesses can no longer be counted on as a “positive anchor” in U.S.-China relations, a top U.S. business lobby said on Wednesday, arguing any deal to end trade tensions must address structural problems in China’s economic system.

U.S. handbags, shovels on $20 billion EU tariff list over Boeing (Reuters) Handbags, tractors, shovels and fish are part of an 11-page list of U.S. imports worth $20 billion that the European Union on Wednesday said it could hit with tariffs in a transatlantic aircraft subsidy dispute.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.647% 2 Year 2.413%
5 Year 1.661% 5 Year 2.413%
10 Year 1.804% 10 Year 2.599%
30 Year 2.102% 30 Year 3%

US Economic Data

07:00 AM MBA Mortgage Applications, Apr 12 Actual -3.50% Prior -5.60%
08:30 AM Trade Balance, Feb Survey -$53.4b Prior -$51.1b
10:00 AM Wholesale Inventories MoM, Feb Survey 0.30% Prior 1.20%

Canadian Economic Data

08:30 AM Int’l Merchandise Trade, Feb Survey -3.25b Prior -4.25b
         CPI NSA MoM, Mar Survey 0.70% Prior 0.70%
          CPI YoY, Mar Survey 1.90% Prior 1.50%
          Consumer Price Index, Mar Survey 135.4 Prior 134.5

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