Market Update

US tsys flat to slightly higher in the long end, 10Y 2.26%, S&P futures higher (+6), crude oil unch @ 58.80.  Core EGBs lower led by 10Y gilts after BOE Ramsden said rates should move higher if Brexit goes smoothly. US data includes Q1 GDP & initial claims.  GOCs unch ,10Y 1.58% after falling to 1.52% post BOC rate decision yest, spreads vs tsys narrowing 4bps, maintaining outperformance after the relatively upbeat BOC statement.  BOC Senior Deputy Wilkins to give an economic progress report at 2:15ET.

News headlines

S&P Futures, Europe Stocks Advance; Bonds Steady: Markets Wrap (Bloomberg) U.S. equity futures climbed with European stocks on Thursday as investors awaited the latest developments in the outlook for global growth and trade. Treasury yields steadied near their lowest since 2017.

TSX futures little changed after last session’s fall (Reuters) Futures for Canada’s main stock index were little changed on Thursday, a day after Toronto Stock Exchange’s S&P/TSX fell more than one percent.

Oil Rises as U.S. Inventory Decline Offsets Angst Over Trade War (Bloomberg) Oil recovered in New York as signs of tighter supplies in the U.S. offset concerns that the prolonged trade war between America and China will hurt demand.

Taking aim at U.S., China says provoking trade disputes is ‘naked economic terrorism’ (Reuters) Provoking trade disputes is “naked economic terrorism”, a senior Chinese diplomat said on Thursday, ramping up the rhetoric against the United States amid a bitter trade war that is showing no signs of ending soon.

China willing to meet reasonable rare earth demand from other countries (Reuters) China is willing to meet reasonable demand for rare earths from other countries, but it would be unacceptable that countries using Chinese rare earths to manufacture products would turn around and suppress China, its commerce ministry said.

Bump in the night: FX flash crashes put regulators on alert (Reuters) The increasing frequency of flash crashes in the $5.1 trillion-a-day foreign exchange market has regulators scrambling for answers.

Bank of Canada signalling it won’t cut rates anytime soon: CIBC’s Tal (BNN) The Bank of Canada is signalling that it won’t be cutting interest rates in the near future, despite some economists and investors betting that it will, according to CIBC Capital Markets Deputy Chief Economist Benjamin Tal.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.539% 2 Year 2.107%
5 Year 1.476% 5 Year 2.071%
10 Year 1.584% 10 Year 2.261%
30 Year 1.827% 30 Year 2.684%

US Economic Data

08:30 AM GDP Annualized QoQ, 1Q S Survey 3.00% Prior 3.20%
        Personal Consumption, 1Q S Survey 1.20% Prior 1.20%
        GDP Price Index, 1Q S Survey 0.90% Prior 0.90%
        Core PCE QoQ, 1Q S Survey 1.30% Prior 1.30%
        Initial Jobless Claims, May 25 Survey 214k Prior 211k
        Continuing Claims, May 18 Survey 1662k Prior 1676k
        Wholesale Inventories MoM, Apr P Survey 0.10% Prior -0.10%
09:45 AM Bloomberg Consumer Comfort, May 26 Survey — Prior 60.3
10:00 AM Pending Home Sales MoM, Apr Survey 0.50% Prior 3.80%

Canadian Economic Data

08:30 AM Current Account Balance, 1Q Survey -$18.10b Prior -$15.48b

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