Market Update

US tsys slightly lower, down in recent trade as stock futures erase losses (S&P +4), US10Y 2.59%, below avg volume in TY futures (290k).  Second tier data today with Phili Fed non-man index, Richmond Fed & March New Home Sales.  The latter have rebounded 20% since hitting a two year low in Oct, with lower l.t. mortgage rates the main driver. In Canada, 10Y yields ~1.80%, curve continuing to steepen led by 10s, 5s10s +4bps over the week. BOC/MPR tomorrow – expect BOC to leave rates unch – the Bank seems to be caught between a confluence of offsetting factors – firming signs of inflation as well as building slack in the economy and an over indebted housing sector.  In provis, supply from Ont & QC a possibility – spreads holding near recent tights, provi curve steeper along with underlying GOC curve.

News headlines

U.S. may follow China with first quarter GDP upside surprise (Reuters) A temporary government shutdown with no end in sight, rising trade conflicts and a global growth slowdown: the first quarter outlook for the U.S. economy did not look promising at the turn of the year.

TSX futures flat, oil prices continue to rise (Reuters) Futures for Canada’s main stock index were little changed on Tuesday, even though oil prices rose to their highest level since November after the U.S. tightened sanctions on Iran.

Stocks Mixed as Earnings Roll In; Oil Extends Gain: Markets Wrap (Bloomberg) U.S. equity-index futures were range bound, European stocks slipped and Asian shares nudged higher on Tuesday as many markets reopened after a long weekend and as the results season ramps up. Crude extended recent gains.

Oil hits highest since November as U.S. to tighten Iran sanctions (Reuters) Oil prices hit their highest since November on Tuesday after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran and further tightening global supply.

China complains to U.S. over end to Iran oil sanction waivers (Reuters) China’s Foreign Ministry said on Tuesday it has formally complained to the United States over its decision to end waivers on sanctions on Iranian oil imports, adding another fault line to already complicated Beijing-Washington ties.

Dollar gains with FX volatility holding near five-year lows (Reuters) The dollar held near three-week highs on Tuesday as a drop in market volatility ramped up demand for riskier assets, with higher U.S. bond yields also offering some support.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.622% 2 Year 2.391%
5 Year 1.619% 5 Year 2.386%
10 Year 1.798% 10 Year 2.589%
30 Year 2.104% 30 Year 2.997%

US Economic Data

09:00 AM FHFA House Price Index MoM, Feb Survey 0.50% Prior 0.60%
10:00 AM Richmond Fed Manufact. Index, Apr Survey 10 Prior 10
          New Home Sales, Mar Survey 649k Prior 667k
         New Home Sales MoM, Mar Survey -2.70% Prior 4.90%

Canadian Economic Data

08:30 AM Wholesale Trade Sales MoM, Feb Survey 0.10% 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