Market Update
Tsys unch, giving up earlier gains on upward revision in March Person spending, PCE deflator, US10Y 2.243%. Heavy volume in TY futures o/n, mostly finishing off the Jun-Sep roll. USD weaker vs yen but higher vs euro. Core Euro bonds lower, UK gilt curve steeper, German bund yields 1-2bps higher. The latest poll showed continued tightening in the upcoming UK election. ECB Draghi said there’s little urgency to unwind the ECB balance sheet, and extraordinary accommodation is still necessary. GOCs relatively quiet yest, thou with definite bid tone as bunds rallied on Draghi. GOCs lower after Cdn IPPI, raw material data came in stronger for Apri. Provis starting unch, BC/Ont wider after agreement between Greens and NDP.
News headlines
Europe Risks Weigh on Stocks; Crude, Gold Retreat: Markets Wrap (Bloomberg) European stocks fell and the euro struggled against the dollar as investors were reminded of a few of the challenges still faced by the world’s biggest single market. Oil joined a wider selloff in commodities.
Oil slips on oversupply worries despite OPEC deal (Reuters) Oil prices fell on Tuesday, pressured by concerns that production cuts by the world’s big exporters may not be enough to drain a global glut that has depressed the market for almost three years. Benchmark Brent crude LCOc1 was down 45 cents a barrel at $51.84 by 1000 GMT (6 a.m. ET), having gained 14 cents on Monday. U.S. light crude CLc1 was 25 cents lower at $49.55.
Canada-EU Trade Deal Is a Model in Automation Era, Trudeau Says (Bloomberg) The Canada-EU trade agreement is “a blueprint for future ambitious trade deals’’ in an age of automation where job security is threatened, Prime Minister Justin Trudeau says. Trudeau, in a speech to lawmakers and business figures in Rome, lauded the pact as a model in an era of protectionism. The speech comes as Trudeau faces a lengthy trade battle with Donald Trump over lumber, airplanes, steel, aluminum and the North American Free Trade Agreement.
Euro-Area Confidence Unexpectedly Slips From Decade High (Bloomberg) Euro-area economic confidence fell for the first time this year and consumers’ outlook for inflation weakened, pointing to subdued price pressures. The European Commission’s index of executive and consumer sentiment fell to 109.2 in May from a revised 109.7 in April. While that fell short of economists’ expectations, the gauge remains close to the highest level in a decade. Another measure showed 12-month price expectations declined for a second month.
French consumer confidence rises to approach 10-year high in May (Reuters) French consumer confidence rose slightly more than expected in May to reach a near 10-year high, data released on Tuesday from the official INSEE statistics agency showed. INSEE said that its monthly consumer confidence index rose to 102 from 100 in May, hitting the highest level since August 2007 and surpassing economists’ average forecast for a reading of 101. FRCONC=ECI
French first-quarter growth revised up to 0.4 percent (Reuters) The French economy grew 0.4 percent in the first quarter from the previous three months, the INSEE national statistics agency said on Tuesday, revising the figure up from a preliminary estimate of 0.3 percent.
Overnight markets
Overview: US 10yr note futures are up 0.062% at 126-09, S&P 500 futures are down -0.17% at 2409.75, Crude oil futures are down -0.76% at $49.42, Gold futures are down -0.68% at $1262.7, DXY is up 0.06% at 97.502, CAD/USD is up 0.24% at 0.7415.
US Economic Data
| 8:30 AM | Personal Income, Apr,0.4% , est. 0.4% (prior 0.2%) |
| Personal Spending, Apr, 0.4%, est. 0.4% (prior 0.0%, revised 0.3%) | |
| PCE Core, m/m, Apr, 0.2%, est. 0.1% (prior -0.1%) | |
| PCE Core, y/y, Apr, 1.5%, est. 1.5% (prior 1.6%) | |
| 9:00 AM | S&P Case-Shiller Home Price Index, m/m, Mar, , est. 0.90% (prior 0.69%) |
| S&P Case-Shiller Home Price Index, y/y, Mar, , est. 5.70% (prior 5.85%) | |
| 10:00 AM | Conference Board Consumer Confidence Index, May, est. 119.6 (prior 120.0) |
| Dallas Fed Manufacturing Activity, May, est. 15.0 (prior 16.8) |
Canadian Economic Data
| 8:30 AM | Current Account Balance, 1Q, -$14.05b, est. -$12.00b (prior -$10.73b, revised -$11.78b) |
| Industrial Product Price Index, m/m, Apr, 0.6% (prior 0.8%) | |
| Raw Materials Price Index, m/m, Apr, 1.6% (prior -1.6%, revised 1.7%) |
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, David Leclair-Legault
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230