Market Update Tsys higher, US 10Y back below 3.0% (2.994 -3.4bps), along with core Euro bonds after ECB/ Swedish Riksbank. Equity futures higher after positive earnings from FB, Qualcomm, and crude is higher for a 2nd day (68.89 +1.0%) after Macron said the US is likely to withdraw from the Iran nuclear deal and before EIA Nat. gas storage data later this morning. ECB left rates unch as expected, attention turns to Draghi press conf – any hints the ECB is closer to pulling back on stimulus. GOCs higher, slightly wider vs tsys, June 2028 now benchmark 10Y, 10Y roll 0.1bp wider @ 1.6/1.5.
News headlines
Macron Says He Thinks Trump Will Pull Out of Iran Nuclear Deal (Bloomberg) French President Emmanuel Macron said he thinks U.S. President Donald Trump will withdraw from the Iran nuclear accord, dealing a blow to the six-nation agreement reached in 2015 and endorsed by world powers. “My view — I don’t know what your president will decide — is that he will get rid of this deal on his own for domestic reasons,” Macron told journalists Wednesday in Washington, adding that he encouraged the American president to stay in the accord during his three-day visit to the U.S. capital.
Investors Want to Know Whether Draghi Is Worried About Economic Momentum (Bloomberg) Mario Draghi’s press conference on Thursday may well feature repeated versions of the same question: how worried is he? From sagging business confidence to falling industrial output, the region seems to be losing economic momentum after the best performance in a decade last year. Yet the European Central Bank president and his colleagues say the expansion in the 19-nation bloc is stabilizing rather than slowing down.
Deutsche Bank Cuts Wall Street Ambition to Focus on Europe (Bloomberg) Deutsche Bank AG is abandoning its ambitions to be a top global securities firm as it embarks on possibly the most sweeping overhaul yet of its struggling investment bank. Germany’s largest lender will scale back U.S. rates sales and trading, reduce the corporate finance business in the U.S. and Asia, and review its global equities business with a view toward cutting it back, the bank said in a statement Thursday. The measures will lead to a “significant reduction” in the roughly 97,100-person workforce this year, it said.
Stocks Advance as Results Roll In; Treasuries Jump: Markets Wrap (Bloomberg) U.S. equity futures pointed to a higher open with strong earnings lifting Facebook Inc. and Qualcomm Corp., though gains were muted as investors remained cautious about the prospects for future growth. The euro stayed higher as the ECB kept interest rates unchanged. With the common currency holding gains ahead of a press conference from ECB President Mario Draghi, the dollar pulled back from a three-month high. The pound gained alongside the yen. European bonds tracked a jump in Treasuries, with the yield on 10-year U.S. notes falling below 3 percent.
Facebook Sales Top Estimates, Fueled by Ads; Shares Jump (Bloomberg) Facebook Inc. has been embroiled in one controversy after another. But ad sales are near records and users keep flocking to the social network. First-quarter revenue rose 49 percent to $11.97 billion, beating the $11.4 billion average analyst projection, according to data compiled by Bloomberg. In a statement Wednesday, Facebook said it now has 1.45 billion daily users, matching estimates on this key measure of engagement. Shares surged more than 5 percent in extended trading.
TSX futures higher as oil prices rise (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Thursday as oil prices gained on concerns over renewed U.S. sanctions on Iran and falling Venezuelan output. June futures on the S&P TSX index SXFc1 were up 0.11 percent at 7:15 a.m. ET. Canada’s main stock index rose on Wednesday as higher oil prices boosted energy shares, offsetting investor worries about higher bond yields. Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.15 percent at 7:15 a.m. ET, while S&P 500 e-mini futures Esc1 rose 0.22 percent and Nasdaq 100 e-mini futures NQc1 were 0.62 percent higher. [.N]
Freeland slams U.S. on sunset clause, steel as NAFTA talks heat up (BNN) Canada and the U.S. have had a testy exchange over the idea of including a termination clause in NAFTA, with this idea of a so-called sunset clause emerging as a late-stage sticking point in the negotiations. The U.S. has revived the sunset proposal. In the late stages of bargaining, with hopes of a deal within days, sources say the United States has made clear it wants some sort of additional mechanism allowing the easy termination of NAFTA after several years.
Canada’s economy is ‘finally positive’: Poloz (BNN) Bank of Canada Governor Stephen Poloz said on Wednesday the economy was « finally positive » after a long adjustment to a sharp fall in oil prices, but he added there was still softness in several areas of the country. Poloz also told the Senate’s banking committee that while interest rates would go up from their current low levels, moving too quickly could create a financial stability risk. The central bank has hiked three times since last July as the economy improves and the unemployment rate hovers around 40-year lows. It held rates steady last week at 1.25 per cent.
Overnight markets
Overview: US 10yr note futures are up 0.197% at 119-10, S&P 500 futures are up 0.31% at 2652.75, Crude oil futures are up 0.88% at $68.65, Gold futures are up 0.17% at $1325.1, DXY is up 0.07% at 91.233, CAD/USD is down -0.12% at 0.7793.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.913% | 2 Year | 2.476% |
| 5 Year | 2.16% | 5 Year | 2.812% |
| 10 Year | 2.357% | 10 Year | 2.992% |
| 30 Year | 2.452% | 30 Year | 3.179% |
US Economic Data
| 8:30 AM | Initial Jobless Claims, Apr 21st est 230k (232k prior) |
| Continuing Claims, Apr 14th est 1850k (1863k prior) | |
| Durable Goods Orders, Mar est 1.6% (3.0% prior) | |
| Durable Ex Transportation, Mar est 0.5% (1.0% prior) | |
| Cap Goods Orders Nondef Ex Air, Mar est 0.5% (0.3% prior) | |
| Cap Goods Ship Nondef Ex Air, Mar est 0.3% (1.4% prior) | |
| Advance Goods Trade Balance, Mar est -75.0b (-75.4b prior) | |
| Retail Inventories MoM, Mar (0.4% prior) | |
| Wholesale Inventories MoM, Mar est 0.7% (1.0% prior) | |
| 9:45 AM | Bloomberg Consumer Comfort, Apr 22nd (58.1 prior) |
| 11:00 AM | Kansas City Fed Manf. Activity |
Canadian Economic Data
| 04/26 | CFIB Business Barometer, Apr 56.6 (60.7 prior) |
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, Hugues Savard
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230