Market Update
Tsys trading mixed, curve slightly steeper, US 10Y 2.01% on light volume (265k TY1) as focus turns to G20 in Osaka this weekend and US/China trade negotiations. May Personal Income & spending as well as U. of Michigan sentiment scheduled for this morning. Core EGBs flat, Italian spreads ~3bps narrower as Italy PM will ask the EU to delay deficit procedure to Sept or Oct. In Canada, GOCs also flat before Apr GDP and BOC Business Outlook Survey – we expect a mild decline from the -0.6% Q1 reading due mainly to lower capacity utilization (lowest since 2017) and ongoing trade concerns with the US.
News headlines
U.S. Futures, European Stocks Rise as G-20 Starts: Markets Wrap (Bloomberg) American equity futures climbed alongside European stocks on Friday ahead of the highly anticipated U.S.-China presidential meeting that could determine the next chapter in the trade war. Asian shares edged lower, while bonds drifted.
TSX futures rise ahead of GDP data (Reuters) Canada’s main stock index futures edged higher on Friday, ahead of gross domestic product data, gaining support from higher gold prices.
Trump prepares for ‘productive’ talks with Xi on trade war (Reuters) U.S. President Donald Trump on Friday said he hoped for productive talks with Chinese President Xi Jinping on a trade war that is casting a shadow on global growth, but said he had not made any promises about a reprieve from escalating tariffs.
European shares move higher ahead of pivotal G20 meeting (Reuters) European stocks edged higher on Friday, as investors treaded cautiously ahead of a critical G20 meeting where the outcome of U.S-China trade talks will be closely monitored against the backdrop of a slowing global economy.
G20 meeting may offer more clarity for OPEC, non-OPEC: Russia’s Novak (Reuters) Russian Energy Minister Alexander Novak said on Friday he hoped a meeting of G20 nations in Japan would provide clarity for OPEC and non-OPEC oil producers as they consider whether to extend a deal on cutting crude supplies beyond June.
Oil Set for Best Month Since January Before Crucial Meetings (Bloomberg) The U.S.-Iran standoff and falling American stockpiles have propelled oil toward its biggest monthly gain since January but crucial meetings in the next few days will determine whether the rally continues.
Canada has ‘broad international’ support on China file: Freeland (BNN) Canada is fortunate to have assembled a “broad international coalition” of countries who support Canada and believe arbitrary detentions are harmful, Foreign Affairs Minister Chrystia Freeland said Friday at the G20 summit in Osaka.
Euro set for biggest monthly gain in 17 months before price data (Reuters) The euro stabilised on Friday but was on track for its biggest monthly gain in 17 months as traders questioned how much firepower the European Central Bank could potentially roll out to support a struggling economy and boost inflation.
Market Overview: US 10yr note futures are down -0.098% at 127-26, S&P 500 futures are up 0.18% at 2936.25, Crude oil futures are up 0.17% at $59.53, Gold futures are up 0.33% at $1416.6, DXY is down -0.05% at 96.15, CAD/USD is down -0.01% at 0.7637.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.46% | 2 Year | 1.747% |
| 5 Year | 1.389% | 5 Year | 1.775% |
| 10 Year | 1.48% | 10 Year | 2.017% |
| 30 Year | 1.716% | 30 Year | 2.535% |
US Economic Data
| 08:30 AM | Personal Income, May Survey: 0.30% Prior: 0.50% |
| Personal Spending, May Survey: 0.50% Prior: 0.30% | |
| Real Personal Spending, May Survey: 0.40% Prior: 0.00% | |
| PCE Deflator YoY, May Survey: 1.50% Prior: 1.50% | |
| PCE Core Deflator MoM, May Survey: 0.20% Prior: 0.20% | |
| PCE Core Deflator YoY, May Survey: 1.50% Prior: 1.60% | |
| 09:45 AM | MNI Chicago PMI, Jun Survey: 53.5 Prior: 54.2 |
| 10:00 AM | U. of Mich. Sentiment, Jun F Survey: 97.9 Prior: 97.9 |
Canadian Economic Data
| 08:30 AM | GDP MoM, Apr Survey: 0.20% Prior: 0.50% |
| GDP YoY, Apr Survey: 1.60% Prior: 1.40% | |
| Industrial Product Price MoM, May Survey: -0.10% Prior: 0.80% | |
| Raw Materials Price Index MoM, May Survey: -3.00% Prior: 5.60% | |
| 10:30 AM | BoC Business Outlook Future Sales, 2Q Survey: — Prior: 6.0 |
| BoC Senior Loan Officer Survey, 2Q Survey: — Prior: -2.7 |
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