Commentaires

Market Update Tsys trading lower, narrow range in TY futures overnite on avg volume (225k), market focus on Trump Iran announcement at 2:00ET. USD index setting new highs , DXY 93.08 (+0.36%), euro setting new lows, equities weaker (S&P fut -6.5), crude -1.0%. Core EGBs lower, German 10Y bund 1.5bps higher @ 0.54% after better than exp March Ind Prod. EU peripherals weaker led by Italy – 10Y BTP/bund +9bps @ 132 the widest since March 28th  , Italy looks to be heading into another election in July. GOCs slightly lower, in line with tsys, 10Y 2.33%,  April Housing Starts 214k vs 220k exp. Provis opening unch after closing 0.5bps tighter yest, Ontario  credit curve continuing to steepen , Ont48/27 14.7bps new wides +2bps since mid April, as underlying 10/30 GOC curve is ~9bps flatter over the period. 

News headlines 

Trump to Announce Iran Deal Decision on Tuesday (Bloomberg)  President Donald Trump will announce on Tuesday whether the U.S. will leave the 2015 Iran nuclear agreement, a signature achievement by his predecessor that he’s long derided as “the worst deal ever.” Foreign leaders and analysts say the president is likely to exit, casting the future of an accord widely seen as reining in Iran’s nuclear program into doubt. Trump has said the deal doesn’t do enough to address threats from the Islamic Republic’s ballistic missile program and the country’s involvement in regional conflicts.

U.S., China Set for Trade Brawl in Geneva (Bloomberg) The U.S. and China are set to clash in Geneva on Tuesday as envoys from the world’s two largest economies address the World Trade Organization amid threats of a trade war. Chinese Ambassador Zhang Xiangchen will criticize Washington’s proposed tariffs on $150 billion of Chinese goods as well as levies on steel and aluminum that went into effect in March, according to an agenda of the meeting. Zhang’s U.S. counterpart, Dennis Shea, is expected to defend the measures and find fault with Beijing’s retaliation.

Trump, Republicans Raise Alarms About West Virginia Primary Race (Bloomberg)  Republican officials were thrown into a panic on the cusp of Tuesday’s three crucial Senate primaries as they confronted a late surge by controversial and confrontational candidate Don Blankenship in West Virginia. There’s a high level of concern among party leaders that Blankenship, a former coal executive who served prison time and has launched racially tinged attacks on Senate Majority Leader Mitch McConnell’s wife, could win the three-way Republican primary, said one GOP strategist familiar with the race. That could damage Republican chances of ousting Democratic Senator Joe Manchin in November.

Dollar Advances, Oil Declines Before Iran Decision: Markets Wrap (Bloomberg) The dollar extended its winning streak while oil dropped as traders braced themselves for President Donald Trump’s decision on the Iran nuclear deal. Lingering uncertainty weighed on risk sentiment, and U.S. futures fell alongside European stocks. The greenback shook off a slow start to climb higher for a third consecutive session, given a boost as Fed Chairman Jerome Powell stuck with the central bank’s message of gradual tightening. U.S equity futures followed the Stoxx Europe 600 Index lower, with Italian stocks the worst performers in that region as the country looks set for fresh elections. Shares in Asia advanced. West Texas crude traded around $70 a barrel, paring a rally that had brought it to the highest since 2014. Treasuries were steady.

TSX futures little changed ahead of Trump’s Iran decision (Reuters) Futures for Canada’s main stock exchange were little changed on Tuesday, as investors awaited an announcement by U.S. President Donald Trump later in the day on whether the United States will reimpose sanctions on Iran. Trump will announce whether he will pull out of the Iran nuclear deal or stay in and work with European allies who have struggled to persuade him that it has successfully halted Iran’s nuclear ambitions.

Tech sector gains keep world shares near one-week high (Reuters) Oil prices eased on Tuesday from 3-1/2-year highs they hit on worries the United States may be set to pull out of a key nuclear accord with Iran, but robust tech sector gains in Asia helped support world stocks near one-week highs. U.S. President Donald Trump will announce at 1800 GMT whether Washington will withdraw from a deal that eased economic sanctions on Iran in exchange for Tehran limiting its nuclear program. A decision to leave the accord could give another boost to this year’s 13 percent oil rally, by constraining Iranian crude exports.

Canadian business confidence plunges to lowest since 2016 (BNN) Canadian business confidence has plunged to the lowest level in 18 months amid increasing concerns about the impact of U.S. tax cuts, a weak loonie and NAFTA uncertainty, according to a report released Monday by the Conference Board of Canada. The Conference Board’s Index of Business Confidence fell 6.9 points to 93.1 in the first quarter, with business leaders saying they do not expect last year’s sales momentum to continue in 2018, the report said

Overnight markets

Overview: US 10yr note futures are down -0.039% at 119-21, S&P 500 futures are down -0.3% at 2662, Crude oil futures are down -0.95% at $70.06, Gold futures are down -0.2% at $1311.5, DXY is up 0.36% at 93.083, CAD/USD is up 0.62% at 0.7715.

US Economic Data

Canadian Economic Data

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

Market Update Tsys slightly higher across the curve on very light volume (130k TY fut), 10Y 2.945% (-05bps). Crude above $70 for the first time since Nov 2014 on rising tensions in the middle east, USD index highest since Dec, US equity futures higher (S&P +6.75, Nasdaq +32). Several Fed speakers on tap this week, data focus on April CPI Thurs  (0.3% exp). GOCs higher in line with tsys, provis unch after closing Friday 0.5bps tighter. 

News headlines

A Nafta Deal in May? Negotiators Will Try, But It Won’t Be Easy (Bloomberg) Cabinet-level negotiators from the three Nafta nations meet again in Washington this week to attempt a breakthrough on the trade deal in May. It won’t be easy. Several contentious issues remain unresolved after more than eight months of talks between the U.S., Mexico and Canada to renegotiate the North American Free Trade Agreement. Discussions last took place in late April and will resume Monday, with U.S. Trade Representative Robert Lighthizer expected to host Mexico’s Economy Minister Ildefonso Guajardo and Canadian Foreign Affairs Minister Chrystia Freeland.

Dollar Advances With Stocks; Oil Extends Gain: Markets Wrap (Bloomberg) The dollar resumed its winning ways after a shaky start on Monday, reversing early losses to strengthen. U.S. equity futures and European stocks also climbed following a muted Asian session, and oil extended recent gains to hit another milestone. The Stoxx Europe 600 Index extended Friday’s increase as most national gauges in the region advanced, though trading volumes were lighter than usual thanks to a holiday in the U.K. Contracts for the S&P 500 pointed to the index building on a jump at the end of last week. In Asia, shares climbed in Australia and rallied in Shanghai. The yen fell as Japanese traders returned from holidays, while the euro also weakened. West Texas crude pushed above $70 a barrel for the first time since November 2014 as investors braced for the re-imposition of some U.S. sanctions on Iran. The 10-year Treasury yield ticked higher.

China Softens Tone on Trade After U.S. Leaves Empty Handed (Bloomberg) China tried to strike a positive tone after Donald Trump’s trade negotiators left Beijing Friday with no public sign of an agreement, reiterating that the U.S. shouldn’t make unreasonable demands. State media over the weekend offered a somewhat positive assessment of the U.S. trade talks, urging more negotiations while saying the Americans should be “rational and pragmatic.” And in a move that would meet some U.S. demands, the Commerce Ministry is studying measures to further lower import tariffs on some food, pharmaceuticals and medical instruments, Economic Information Daily reported Monday, citing unidentified people.

Putin Starts New Term as Tensions With West Cloud Economic Hopes (Bloomberg) Vladimir Putin was sworn in for the fourth time as president, promising Russians an “economic and technological breakthrough” in his new six-year term amid the deepest standoff with the West in decades. He’s expected to reappoint his longtime ally Dmitry Medvedev as prime minister as early as Monday in what would be a strong signal of continuity despite a disappointing economic performance.

TSX futures rise on higher crude prices (Reuters) Canada’s main stock index futures rose on Monday, helped by oil prices that touched their highest levels since late-2014 on the back of Venezuela’s deepening economic crisis. June futures on the S&P TSX index SXFc1 were up 0.06 percent at 7:15 a.m. ET. No major economic indicators are scheduled for release. The Toronto Stock Exchange’s S&P/TSX .GSPTSE rose 107.93 points, or 0.69 percent, to 15729.4 on Friday. [nL8N1SB6WL] Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.36 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were up 0.41 percent and Nasdaq 100 e-mini futures NQc1 were up 0.65 percent.

Morneau fires back on Canadian competitiveness warnings (BNN) Federal Finance Minister Bill Morneau is firing back amid a growing chorus of warnings that Canada’s level of competitiveness is eroding. “I will constantly go back to business people and listen to them and say, you need to help me to understand what exactly are the prescriptions to ensure we remain competitive,” Morneau said in an interview with BNN Bloomberg’s Amanda Lang on Friday. “But what I won’t do is accept the frame that we’re not competitive.”

U.S. adds 164,000 positions in April; jobless rate hits 3.9% (BNN) U.S. hiring rebounded in April and the unemployment rate dropped below 4 per cent for the first time since 2000, while wage gains unexpectedly cooled, suggesting the labour market still has slack to absorb. Payrolls rose 164,000 after an upwardly revised 135,000 advance, Labor Department figures showed Friday. The jobless rate fell to 3.9 per cent, the lowest since December 2000, after six months at 4.1 per cent. Average hourly earnings increased 0.1 per cent from the prior month and 2.6 per cent from a year earlier, both less than projected. 

Overnight markets

Overview: US 10yr note futures are down -0.091% at 119-19, S&P 500 futures are up 0.32% at 2671.5, Crude oil futures are up 1.13% at $70.51, Gold futures are down -0.3% at $1310.7, DXY is up 0.41% at 92.944, CAD/USD is up 0.32% at 0.776.

US Economic Data

Canadian Economic Data

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

Market Update Tsys higher on light volume (206k TY fut), 10Y 2.93 (-1.7bps), tsy curve 1bp flatter. April non farm payrolls due at 8:30 – 185k increase exp rebounding from March’s weak 103k, with the unem rate forecast to decline 0.1% to 4.0% with AHE steady at 2.7%.  EGBs mixed ahead of the US data, 10Y bund lower in rangebound trade despite more weak Eurozone data (PMI, retail sales), 10Y yield 0.532% (+0.4bps). GOCs higher in line with tsys, curve unch , 2s30s 2.5bps flatter wk/wk. New 10Y roll (28/27) 0.5bps flatter (1/0.9) since 10Y auction last week (1.5), while the old 10Y roll (27/26) 0.4bps cheaper so 27s starting to look cheap, June 26s anchored by CTD status. 

News headlines

U.S.-China Trade Talks End With Key Differences Still Unresolved (Bloomberg) Two days of U.S.-China trade discussions ended in Beijing with an agreement to keep on talking, and little else. China’s official Xinhua News Agency reported Friday afternoon that both sides reached a consensus on some trade issues while acknowledging major disagreements on some matters. It said they would continue discussions, without providing specifics for when they would start again. Neither side briefed the media, and the U.S. delegation led by Treasury Secretary Steven Mnuchin departed Beijing in the evening.

Buffett’s Berkshire Braces for ‘Wild’ Swings From New Accounting (Bloomberg)  Warren Buffett’s company is scheduled to report earnings Saturday morning before its annual meeting, and a new accounting rule could sink results. Berkshire is now required to report unrealized gains and losses from equity investments in net income. Buffett has warned that the change could be significant because Berkshire’s more than $170 billion stock portfolio can easily fluctuate by $10 billion or more in a quarter.

Stocks Mixed Amid China Talks; Payrolls in Focus: Markets Wrap (Bloomberg) Stocks in Europe edged higher despite a decline in Asia as investors assessed trade talks between the U.S. and China. U.S. equity-index futures declined while the dollar advanced ahead of the monthly U.S. jobs report. Basic materials and technology companies led gains in the Stoxx Europe 600 index as the euro slipped amid mounting concern about the region’s economic outlook. Financials fell after disappointing earnings reports from BNP Paribas SA, Societe Generale SA and HSBC Holdings Plc. Stocks from Sydney to Hong Kong retreated earlier. U.S. Treasury yields were steady along with core European bonds.

U.S. Looks Beyond Iran Nuclear Deal Deadline to What Comes Next (Bloomberg)  Donald Trump seems set on pulling out of the Iran nuclear deal next week, with U.S. officials suggesting that any initial diplomatic turbulence will be followed by negotiations for a new accord. There’s one big hang-up: Iran is ruling out new talks, calling the current agreement “non-negotiable.” And America’s European allies continue to back it, saying the deal has been essential to reining in Iran’s nuclear program.

TSX futures slightly lower ahead of U.S. jobs report (Reuters) Futures for Canada’s main stock index edged lower on Friday, tracking gold prices and ahead of the closely watched U.S. jobs data. U.S. job growth likely accelerated in April after a weather-related slowdown in the previous month, with the unemployment rate expected to drop to near a 17-1/2-year low of 4.0 percent. June futures on the S&P TSX index SXFc1 were down 0.05 percent at 7:15 a.m. ET.

Canada posts unexpected $4.1B trade deficit, its biggest ever (BNN) Canada’s trade deficit unexpectedly widened to a record in March as a surge in automobile imports outpaced a rebound for the nation’s exporters. The merchandise trade deficit widened to $4.14 billion from $2.93 billion a month earlier, Statistics Canada reported Thursday in Ottawa. Economists predicted the March figure would narrow to $2.25 billion.

Canada Post Group reports 2017 profit up as parcel business swells (Toronto Star) The Canada Post Group of Companies reported a profit of $144 million for 2017, up from $81 million in 2016, as its parcel business grew with the popularity of online shopping. The improved profit at the company which includes Canada Post, Purolator and SCI Group came as revenue from operations totalled nearly $8.23 billion in last year, up from $7.88 billion in 2016. Canada Post has seen its parcels business grow significantly as shoppers opt for online retailers, offsetting a decline in the company’s traditional transaction mail business.

Overnight markets

Overview: US 10yr note futures are up 0.117% at 119-27, S&P 500 futures are down -0.3% at 2623.75, Crude oil futures are up 0.22% at $68.58, Gold futures are down -0.05% at $1312, DXY is up 0.09% at 92.496, CAD/USD is up 0.18% at 0.777.

US Economic Data

Canadian Economic Data

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