Market Update
US tsys rebounding from earlier losses in Asia, tsy yields 0.5-1bp lower led by the long end with the 10Y 2.04% . Stock futures saw a sharp pullback in early NA trading after WSJ story linking trade agreement to lifting of US ban on Huawei, also news Ford will cut 20% of its European workforce S&P futures +4.5. Key events in the US include updated Q1 GDP (3.2% vs 3.1% prev) and $32bln 7Y note auction. GOCs higher, narrower vs tsys out to 10s, 10Y 1.49%. Focus on tomorrow’s April GDP and Business Outlook Survey. Yesterday Telus priced $800mln in 7Ys @ 133.2, which closed 127/, proceeds used to paydown its 2020 issue. Back in March Telus issued 10s @ 175 which are currently 158/153, so 133 looked to be a 7-10bp concession.
News headlines
U.S. Futures Pare Gain on Trade Doubts Before G-20: Markets Wrap (Bloomberg) U.S. equity futures pared a gain on Thursday and European stocks turned lower amid edgy trading in the build-up to a potentially pivotal G-20 meeting in Japan. Treasuries reversed a small drop and gold pared a decline.
TSX futures rise on global cues (Reuters) Stock futures for Canada’s main equity index rose on Thursday, as the risk appetite returned to global markets following a media report that the U.S. and China have tentatively agreed to a truce ahead of a highly-anticipated weekend meeting of the two nations’ leaders in Tokyo.
China urges U.S. to lift sanctions on Huawei as Trump-Xi meeting looms (Reuters) The United States should immediately remove sanctions on Chinese telecoms equipment maker Huawei, a commerce ministry spokesman said on Thursday, days before the two countries’ leaders are due to meet for talks on trade.
EU to call for help from G20 leaders in reforming WTO (Reuters) European Union leaders will this week urge the G20 to help reform the World Trade Organization in order to preserve a rules-based system which is under threat from an escalating trade war between China and the United States.
Oil Retreats From Five-Week High as Trump Damps Trade Optimism (Bloomberg) Oil retreated from a five-week high in New York after U.S. President Donald Trump warned he might impose substantial additional tariffs on Chinese imports.
Bitcoin slides 12%, ending recent surge (Reuters) Bitcoin’s price skidded 12% lower on Thursday to around $11,383 after hitting an 18-month high of nearly $14,000 earlier this week.
Corporations take it on the chin in first Democratic debate (Reuters) To the Democrats running for president of the United States, corporations charge too much for medicines and other critical goods, do not pay enough in taxes and repay bailouts by taking jobs overseas.
Market Overview: US 10yr note futures are up 0.061% at 127-22, S&P 500 futures are up 0.21% at 2924.25, Crude oil futures are down -0.89% at $58.85, Gold futures are down -0.47% at $1408.7, DXY is down -0.04% at 96.18, CAD/USD is up 0.03% at 0.7616.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.447% | 2 Year | 1.765% |
| 5 Year | 1.386% | 5 Year | 1.791% |
| 10 Year | 1.488% | 10 Year | 2.036% |
| 30 Year | 1.727% | 30 Year | 2.557% |
US Economic Data
| 08:30 AM | GDP Annualized QoQ, 1Q T Survey: 3.20% Prior: 3.10% |
| Personal Consumption, 1Q T Survey: 1.30% Prior: 1.30% | |
| GDP Price Index, 1Q T Survey: 0.80% Prior: 0.80% | |
| Core PCE QoQ, 1Q T Survey: 1.00% Prior: 1.00% | |
| Initial Jobless Claims, Jun 22 Survey: 220k Prior: 216k | |
| Continuing Claims, Jun 15 Survey: 1665k Prior: 1662k | |
| 09:45 AM | Bloomberg Consumer Comfort, Jun 23 Survey: — Prior: 61.8 |
| 10:00 AM | Pending Home Sales MoM, May Survey: 1.0% Prior: -1.5% |
Canadian Economic Data
There is no Canadian economic data for today.
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