Market Update

US tsys slightly higher on heavy volume in tsy futures, 628k TY1 contracts by 8:00 more than double the avg. Equities firmer, crude down 1.6% @ 50.53 after reaching a five week high 52.00 earlier in the session. EGBs outperforming, gilt/bund yields 3-4bps lower as DAX futures fell sharply at the outset of trading, and surprise downward revision to UK Q1 GDP. GOCs higher in line with tsys, curve slightly flatter after a big flattening move post FOMC minutes yest led bythe long end 2s30s ~5bps flatter vs unch in the US. Provis widened slightly yest despite a solid Ont 48 reopening, of which 400mln was carve out. BMO 10NC5 NVCC new issue yest, @ 156 clsoed 1bp wider, likely more bank supply coming as has been light so far.

News headlines 

World stocks hit record after Fed minutes, oil up as OPEC meets (Reuters) World stocks hit record highs on Thursday and the dollar dipped after the U.S. Federal Reserve signaled caution in raising interest rates, while oil prices rose in anticipation of top producers agreeing to extend output cuts for up to a year.

OPEC to Extend Oil Cuts for Nine Months to End Global Glut (Bloomberg) OPEC extended oil production cuts for nine more months after last year’s landmark agreement failed to eliminate the global oversupply or achieve a sustained price recovery. Members of the organization agreed to prolong their accord through March, said two delegates familiar with the decision, asking not to be identified before an official announcement is made. Ministers are scheduled to discuss the extension with non-member producers later on Thursday.

Toronto Homeowners Are Suddenly in a Rush to Sell (Bloomberg) Toronto’s hot housing market has entered a new phase: jittery. After a double whammy of government intervention and the near-collapse of Home Capital Group Inc., sellers are rushing to list their homes to avoid missing out on the recent price gains. The new dynamic has buyers rethinking purchases and sellers asking why they aren’t attracting the bidding wars their neighbors saw just a few weeks ago in Canada’s largest city.

CIBC profit climbs to $1.05-billion, revenue rises (TheGlobeAndMail) CIBC had $1.05-billion of net income in its second quarter, up 11 per cent from a year ago when it reported $941-million of net income. The earnings amounted to $2.59 per share, compared with $2.35 during the second quarter of 2016.

TD profit grows 22 per cent to $2.5-billion (TheGlobeAndMail) TD Bank had $2.5-billion of net income during the second quarter, up 22 per cent from a year ago. The earnings amounted to $1.31 per share. That compared with $1.07 per share or $2.05-billion of net income during the same period last year.

Royal Bank of Canada boosts profit by 9 per cent to $2.8 billion (FinancialPost) Royal Bank of Canada reported an 11 per cent increase in second quarter earnings, beating market forecasts, helped by a strong performance in its capital markets and wealth management businesses.

Overnight markets 

Overview: US 10yr note futures are up 0.062% at 126-05, S&P 500 futures are up 0.25% at 2408, Crude oil futures are down -1.17% at $50.76, Gold futures are up 0.14% at $1258.2, DXY is down -0.02% at 97.221, CAD/USD is up 0.27% at 0.7439.

US Economic Data

8:30 AM Wholesale Inventories, m/m, Apr P, -0.3%, est. 0.2% (prior 0.2%)
  Retail Inventories, m/m, Apr, -0.3%, (prior 0.4%)
  Initial Jobless Claims, May 20, 234k, est. 238k (prior 232k, revised 233k)
  Continuing Claims, May 13, 1923k,  est. 1925k (prior 1898k, revised 1899k)
9:45 AM Bloomberg Consumer Comfort Index, May 21,  (prior 50.2)
11:00 AM Kansas City Fed Manufacturing Activity, May 10, est. 10 (prior 7)

Canadian Economic Data 

8:30 AM CFIB Business Barometer, May (prior 64.4)


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