Market Update

Tsys higher again this morning on risk-off, volume in TY futures ~3x avg, 750k , US 10Y below 2.20% for the first time in a month, Dow futs -European stocks lower-  stoxx -1.0% led by banks -2%. Brazil real fell 5.3% at the open, Brazil stk futures down 10% while the govt has canceled its planned . Core European bonds higher, peripherals outperforming  – 10Y Port/Bund 280 bps new low,  10Y bund 2.10% (-3.4bps), 10Y bund/tsy spd 187 bps also close to recent tights.  Gilts higher, third day in a row despite higher than exp UK inflation and today’s strong Apr retail sales, 10Y gilt 1.034% one month low.  GOCs higher led by longs 2s/30s 2bps flatter, 10Y 1.434%. Provis spds wider 1-3bps yest, this morn another 0.5bps wider.

News headlines 

Global Stocks Plunge After U.S. Rout as Bonds Gain: Markets Wrap (Bloomberg) European and Asian equity markets slumped in the wake of the worst day in eight months for U.S. stocks as the political crisis engulfing U.S. President Donald Trump’s administration drove investors to the safety of bonds. Shares across Europe extended declines following new revelations about undisclosed contacts between Trump’s campaign and the Kremlin. The Justice Department Wednesday appointed a special counsel to probe Russia’s role in the 2016 election, deepening a crisis fueled by reports Trump asked FBI Director James Comey in February to halt an investigation before firing him last week.

Australia’s jobs growth tops forecasts in April (FinancialTimes) The Australian dollar jumped back into positive territory after data showed employment rose more than expected in April and the jobless rate fell to its equal-lowest level this year. That is despite concerns in recent months about the health of the labour market, particularly stagnant wage growth.

Canadian provincial borrowers receive friendly welcome in Britain (FinancialPost) Britain in May is great for a sports fan, for garden enthusiasts and for theatre goers — though speaking personally, July is even better. Canadian borrowers have found attractions in other areas and through those efforts have located a group of willing fixed-income investors interested in buying well-rated paper.

Japan economic growth picks up speed (MarketWatch) Japan’s economy picked up speed in the first three months of 2017, extending its most recent stretch of growth under Prime Minister Shinzo Abe to five quarters, the longest expansion in Japan since 2006. Stronger global demand, especially for tech-related items, and an improvement in household spending helped gross domestic product beat forecasts and rise 2.2% on an annualized basis from the previous three months, according to preliminary figures released Thursday.

Wal-Mart’s comparable sales beat estimates (TheGlobeAndMail) Wal-Mart Stores Inc reported higher-than-expected quarterly comparable sales on Thursday, helped by greater traffic at Wal-Mart and Sam’s Club stores and a rise in online sales. Sales at U.S. stores open at least a year rose 1.4 per cent in the first quarter, excluding fuel. Analysts polled by research firm Consesus Metrix had forecast a rise of 1.3 per cent

Google shifts mobile focus to apps and digital assistant (Reuters) Mobile phone apps took center stage at Google’s annual developer conference on Wednesday as the search giant announced new features for its digital assistant and its popular photo app while devoting little time to the Android mobile operating system.

Overnight markets 

Overview: US 10yr note futures are up 0.037% at 126-15, S&P 500 futures are down -0.37% at 2348.75, Crude oil futures are down -1.24% at $48.46, Gold futures are down -0.06% at $1258, DXY is up 0.14% at 97.713, CAD/USD is up 0.16% at 0.734.

US Economic Data

8:30 AM Initial Jobless Claims, May 13, 232k, est. 240k (prior 236k)
  Continuing Claims, May 6, 1898k, est. 1950k (prior 1918k, revised 1920k)
  Philadelphia Fed Index, May, 38.8, est. 18.5 (prior 22.0)
9:45 AM Bloomberg Consumer Comfort Index, May 14, (prior 49.7)
  Bloomberg Economic Expense, May (prior 53.5)
10:00 AM Leading Index, Apr, est. 0.4% (prior 0.4%)

Canadian Economic Data 

8:30 AM Int’l Securities Transactions, Mar,15.13b  (prior 38.84b, revised 39.16b)


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