Market Update
US tsys higher, yields 1-2.5bps lower led by the short end with S&P futures moving deeper into the red (-12) and crude down ~1.0%. The trump administration is considering limits on China’s video surveillance firm Hikvision ability to use US technology. Qualcomm fell 12% after a US judge ruled the company’s licencing practices are anti competitive. St Louis Fed Pres Bullard said the Fed may have ‘overdone it’ when it raised rates in Dec. FOMC minutes for the May 1st meeting are scheduled for 2:00ET. Powell sought to contain expectations for a rate cut, saying the slowing in inflation was due to transitory factors. In Canada, GOCs are higher, lagging the rise in tsys by ~1bp in the short end, Can/US 3-5bps wider over the week. March Retail Sales forecast to have risen 1.2% vs 0.8% in Feb, mostly due to gas prices. The BOC auctions $700mln in Dec 2050 rrbs at noon with long breakevens trading in the low 140s, real yields ~0.54%.
News headlines
U.S. Stock Futures Edge Down as Tech Tensions Grow: Markets Wrap (Bloomberg) U.S. equity futures dipped and European stocks fluctuated after a mixed session in Asia as investors digested the latest in the Sino-American confrontation over technology. Oil declined while the dollar and Treasuries were steady before the latest Fed minutes.
CANADA STOCKS-TSX futures lower as oil prices slip (Reuters) Stock futures for Canada’s main equity index edged lower on Wednesday as oil prices fell due to an increase in U.S. crude inventories and on demand worries related to the U.S.-China trade war.
Oil Falls as Deepening Trade War Stokes Fear Over Global Growth (Bloomberg) Oil fell on signs the worsening U.S.-China trade war will take a toll on global economic growth, overshadowing the prospect of OPEC and its allies extending production curbs.
In Fed policy review, labor may finally win out over inflation (Reuters) At 2.3 percent, Minneapolis’ jobless rate seems impossibly low, even with national unemployment at a 50-year trough.
Prepare for difficult times, China’s Xi urges as trade war simmers (Reuters) China must prepare for difficult times as the international situation is increasingly complex, President Xi Jinping said in comments carried by state media on Wednesday, as the U.S.-China trade war took a mounting toll on tech giant Huawei.
British Steel goes into liquidation after failing to secure loan (Reuters) British Steel, the country’s second largest steel producer, has collapsed after failing to secure emergency government funding, jeopardising some 25,000 jobs, Britain’s Official Receiver said on Wednesday.
Dollar near one-month highs before Fed minutes; pound dives (Reuters) The dollar held near a one-month high on Wednesday as trade tensions between the world’s two biggest economies remained high before Fed minutes that may give more clues on what prompted U.S. policymakers to strike a broadly neutral stance this month.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.675% | 2 Year | 2.235% |
| 5 Year | 1.638% | 5 Year | 2.211% |
| 10 Year | 1.746% | 10 Year | 2.416% |
| 30 Year | 1.967% | 30 Year | 2.838% |
US Economic Data
| 07:00 AM | MBA Mortgage Applications, May 17 Actual 2.4% Prior -0.60% |
| 02:00 PM | FOMC Meeting Minutes, May 1 |
Canadian Economic Data
| 08:30 AM | Retail Sales MoM, Mar Survey 1.20% Prior 0.80% |
| Retail Sales Ex Auto MoM, Mar Survey 0.90% Prior 0.60% |
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