Market Update

Tsys higher on heavy volume in TY1 futres (>500k vs 260k), bid again on political news after NYT story on Trump/Comey meeting, US 10Y 2.292 (-3.3bps), curve 1bp flatter with longs lagging by 0.5bp. Dow futures off 93pts, USD index lower for a fifth day, crude slightly higher  49.00.    GOCs higher in line with tsys in line with tsys, BOC auctions $1.2bln Dec 48s at noon with 10s/30s 1bp steeper as 10s lead this FTQ rally, 48/45 roll unch -3.1/-3.3. CMB 10Y issue  2.35/27 in the area 48.5 , now 48.5/48 unch. Provis starting weaker, spds 1bp wider, Ont 27s 77.5/76.5. Daimler Canada in the mkt with 3Y @ ~82bps.

News headlines

US STOCKS-Futures slide as concerns over Trump spook investors (Reuters) U.S. stock index futures tumbled on Wednesday amid fears that a fresh controversy around President Donald Trump could derail his ambitious pro-growth agenda.

Oil turns positive as market awaits EIA data (Reuters) Oil prices strengthened on Wednesday ahead of U.S. crude inventory data that could give investors a clue as to whether an OPEC-led output cut is making progress in reducing the persistent global supply overhang.

UK faces pay squeeze as unemployment rate sinks to 42-year low (TheGuardian) UK pay growth lagged inflation for the first time in two-and-a-half years in early 2017, underscoring the growing Brexit squeeze facing many households. Excluding bonuses, earnings rose by 2.1% year on year, the weakest increase since July of last year and below economists’ expectations for a 2.2% rise.

Sterling blips back above $1.2950 after labour data (Reuters) Sterling rose back to the top of the past month’s range against the dollar on Wednesday, bouncing to $1.2952 after an initial dip following wage and jobs numbers that offered mixed messages about Britain’s economic prospects. Against the euro the pound was also 0.2 percent higher on the day, recovering from its weakest levels in five weeks to trade at 85.71 pence per euro.

U.K. Trade Strategy Needs Radical Rethink for Post-Brexit Deals (Bloomberg) The U.K. must “radically” overhaul its approach to trade policy if it is to land post-Brexit deals with other countries, the Institute for Government said. After decades of access to the European Union’s single market, the U.K. is facing a renegotiation of its trading relationship with the bloc and the need to strike deals with the rest of the world on its own. Those tasks will require improvements across the British government in order to be done well, IFG said in a report.

Home Capital’s Perilous Turnaround Will Only Get Harder (Bloomberg) Home Capital Group Inc. is fighting to find the funds it needs to survive as deposits rush out the door. Then comes the hard part. The Toronto-based bank has lost more than C$3.5 billion ($2.6 billion) of deposits since the end of March, hurt by Ontario’s securities regulator saying last month that Home Capital had failed to promptly disclose possible fraud among some mortgage applications around two years ago.

Overnight markets 

Overview: US 10yr note futures are up 0.386% at 126-01, S&P 500 futures are down -0.65% at 2381.5, Crude oil futures are up 0.33% at $48.82, Gold futures are up 1.07% at $1249.6, DXY is down -0.24% at 97.874, CAD/USD is up 0.14% at 0.7339.

US Economic Data

7:00 AM MBA Mortgage Applications, May 12, -4.1% (prior 2.4%)

Canadian Economic Data 

8:30 AM Manufacturing Sales, m/m, Mar, 1.0%, est. 1.3% (prior -0.2%, revised -0.6%)


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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230