Commentaires

Market Update Quiet start to what promises to be a busy week data wise in the US, with tsys slightly weaker, 10Y 2.96% (+0.5bps) on low volume in TY futures (~210k), equity futures higher, reflecting a string of better than expected earnings as well as the Sprint/T-Mobile, Sainsbury/Asda deals. McDonald’s Q1 eps beat highest estimates: $1.79 vs $1.67, comp sales +2.9% vs 2.7% exp. Core EGBs mixed, bunds weaker , curve 1.5bps steeper despite softer regional German CPI.  Gilts are higher, with yield curve bull steepening and as a May BOE looks less likely after last week’s poor GDP figure. In Canada, GOCs are slightly lower, in line with tsys before monthly IPPI/Raw Materials data, while provis have traded down so far this morning, Ont 48s @ 78.0, Ont 27s @ 65 on expectations of more supply. 

News headlines

Ross Says U.S. to Extend Duty Relief to Some Allies, Not All (Bloomberg) The Trump administration plans to extend relief from steel and aluminum tariffs to some countries, but not all, when their temporary exemptions expire on Tuesday, said Commerce Secretary Wilbur Ross. Ross, in an interview in Washington with Bloomberg late Saturday, declined to identify which nations would be spared from the tariffs. He said the announcement will be made right before the May 1 deadline for the duties to kick in. The secretary indicated on Friday that nations have been asked to accept import quotas in return for tariff-free access of the metals into the U.S.

Oil Pares Monthly Gain as U.S. Rigs Counter Iran-Deal Risk (Bloomberg) Oil fell as the U.S. oil rig count rose for a fourth week, but was still poised for a second monthly advance. Futures in New York are up 3.7 percent this month, even after a 1 percent drop on Monday, following data that showed an increase in U.S. drilling activity. A potential withdrawal in May by U.S. President Donald Trump from a 2015 nuclear deal between world powers and Iran would reimpose sanctions on the Middle Eastern producer and curb its exports. Meanwhile, OPEC is trimming output even after concluding it has cleared 97 percent of the surplus that has weighed on prices.

Stocks Advance as Deals Greet Week; Dollar Climbs: Markets Wrap (Bloomberg) Stocks in Europe drifted higher, U.S. futures advanced, and equities across Asia gained as dealmaking activity brought some excitement to the start of a busy week. The dollar climbed while the pound faced pressure as Prime Minister Theresa May lost a key ally. Media and real estate companies led advances in Europe as most national gauges rose, while raw material providers were among the biggest losers as commodities fell. Shares in the FTSE 100 Index climbed to the highest in almost three months, with retailer J Sainsbury Plc jumping the most on record as it plans to buy Walmart Inc.’s U.K. arm, Asda. The pound dropped after Amber Rudd quit as U.K. home secretary, and Housing Secretary Sajid Javid was named her replacement.

Fed Far From Ready to Declare Mission Accomplished on Inflation (Bloomberg) The Federal Reserve is closing in on its elusive 2 percent inflation target but that doesn’t mean policy makers are ready to pronounce mission accomplished. The central bank’s preferred measure of inflation probably clocked in at that level last month after spending much of the past six years below target, government data due out on Monday are expected to show.

Canada stock market shutdown pushes investors to explore options (Reuters) A rare outage at Canada’s major stock exchanges could dent the credibility of operator TMX Group Ltd (X.TO) and encourage investors to explore alternative trading channels, fund managers and traders told Reuters. Canada’s stock market suffered a partial shutdown on Friday, forcing TMX to halt trading more than an hour early. TMX has since said the exchanges will resume trading on Monday after “internal technical issues” were resolved.

TSX set to open higher after Friday’s rare shutdown (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Monday after the world’s sixth largest exchange was forced to halt trading on Friday due to an outage. June futures on the S&P TSX index were up 0.27 percent at 7:15 a.m. ET. The operator of Canada’s stock exchange said over the weekend that it had fixed the error that halted the market for several hours on Friday afternoon.

U.S. economic growth slowed to 2.3% pace in Q1 (BNN) The U.S. economy slowed to a moderate 2.3 per cent annual growth rate in the first quarter as consumer spending turned in the weakest performance in nearly five years. Still, the January-March increase came in better than expected and was enough to propel growth over the past year to come close to the 3 per cent goal set by the Trump administration.

NAFTA ministers head home, plan to reconvene talks in a week’s time (BNN) The politicians leading the NAFTA negotiations left Washington without a deal on Friday, under a cloud of question marks about the continental trading relationship. Canada’s Chrystia Freeland and Mexico’s Ildefonso Guajardo returned home after a week-long round with plans to reconvene around May 7 in hopes of obtaining an agreement this spring. 

Overnight markets

Overview: US 10yr note futures are down -0.039% at 119-15, S&P 500 futures are up 0.29% at 2679.25, Crude oil futures are down -1.01% at $67.41, Gold futures are down -0.74% at $1313.6, DXY is up 0.36% at 91.871, CAD/USD is up 0.3% at 0.7772.

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 continuing higher , US 10Y 2.965 (-1.5.bps) , on above avg volume in TY futures, ahead of Q1 GDP (2.0% vs 2.9% Q4) and ECI.  USD index higher for a third day, the euro declining to the lowest since Jan 12th.  Core EGBs higher led by sharp rally in UK gilts in the wake of a much weaker than exp prelim Q1 GDP report – 0.1% the lowest q/q increase since 2012. Odds of  a May BOE hike collapsed to 20% from 56% yest and 100% last week.  Bunds higher, lagging the rally in gilts,  the 10Y bund erasing this week’s losses.  In Canada,  GOCs are higher, in line with tsys, new 10Y roll (28/27) 0.2 wider 1.7/1.5, 10s30s unch @ 9.5. 

News headlines

Kim Urges Frequent Talks After Declaring Korean ‘Era of Peace’ (Bloomberg) Kim Jong Un called for more meetings with his South Korean counterpart after becoming the first North Korean leader to cross the border to hold talks over his nuclear weapons program. Kim made the offer to South Korean President Moon Jae-in as the pair met Friday on their militarized boundary for the first summit between the rival governments in 11 years. Both men basked in symbolism of the moment. Kim declared “a new history” and an “era of peace,” while Moon said the “weight on our shoulders is heavy.”

European Economy Loses Thrust in Risk for Global Expansion (Bloomberg) Europe’s economy lost momentum in the first quarter as expansions slowed from France to the U.K., threatening to undermine the global growth the continent previously helped power. Figures from across the region pointed to a softer trend in the early part of the year, and U.S. first-quarter data due shortly is also set to show activity weakening. The world’s largest economy is forecast to have grown an annualized 2 percent, a step down from the pace seen through 2017.

Oil Steadies as Traders Weigh Impact of Korea Summit, Iran Deal (Bloomberg) Oil traded near $68 as investors weighed the impact of a potential U.S. pull-out from the Iran nuclear deal and the historic meeting between the leaders of North and South Korea. Futures in New York slipped 0.4 percent, on course for a 0.7 percent drop this week. French President Emmanuel Macron earlier this week predicted President Donald Trump will exit the Iran agreement, while U.S. Defense Secretary Jim Mattis said Thursday a decision on a withdrawal hasn’t been made. North Korean leader Kim Jong Un and South Korean President Moon Jae-in agreed to finally end seven decades of hostile relations this year.

BOJ’s Kuroda Starts New Term With Fresh Commitment to Easing (Bloomberg) Governor Haruhiko Kuroda began his new term at the Bank of Japan much as he did the first one — emphasizing his commitment to hitting 2 percent inflation. The BOJ left its policy settings intact, vowing to push ahead with stimulus even as other major central banks move further toward policy normalization, though at a moderating pace amid signs of slowing economic growth. Still there was a twist — not uncommon in Kuroda’s tenure — as the BOJ’s policy statement omitted mention of the projected time frame for hitting his longstanding 2 percent target.

Amazon Jumps After Posting First-Quarter Earnings Beat (Bloomberg) Shares of Amazon.com Inc. rose in extended trading after the company reported net sales in the first quarter that beat analyst estimates.

No risk of NAFTA termination despite Trump’s bravado: economists (Reuters) U.S. President Donald Trump’s threats to scrap the North American Free Trade Agreement (NAFTA) will soon be a distant memory, likely to be supplanted by only slight changes to the 24-year-old pact, a Reuters poll of economists suggested. None of the 80 forecasters – most based in Canada, the United States and Mexico – polled by Reuters April 16-24 expect NAFTA to be terminated. A large majority said the most likely outcome is a marginally different agreement, with only six expecting radical changes.

Airbus says aims to cut CSeries costs, sell ‘big volumes’ (Reuters) Airbus said on Friday it aims to reduce recurring costs of Bombardier’s CSeries so that it can sell the jetliner in “big volumes” as soon as a deal to buy the loss-making program from Canada’s Bombardier is completed. “We are ready to hit the market” using the global Airbus sales force as soon as the deal closes, Airbus executive Harald Wilhelm told analysts. People familiar with the matter told Reuters in Canada earlier this week that the deal is expected to clear the final regulatory hurdles by the end of May.

CETA’s extended drug patents could cost Ottawa $270M a year (BNN) An extension of drug patent protections in the Canada-EU free trade deal could end up costing Canadians an estimated $392 million a year, and federal coffers up to $270 million more annually, says a new report from the parliamentary budget officer. The report released Thursday sets out to put a price tag on a central — and controversial — element of the Comprehensive Economic and Trade Agreement, or CETA, that went into effect last September.

Overnight markets

Overview: US 10yr note futures are up 0.131% at 119-15, S&P 500 futures are down -0.13% at 2671, Crude oil futures are down -0.28% at $68, Gold futures are up 0.15% at $1319.9, DXY is up 0.37% at 91.904, CAD/USD is up 0.09% at 0.7761.

US Economic Data

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, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update Tsys higher, US 10Y back below 3.0% (2.994 -3.4bps), along with core Euro bonds after ECB/ Swedish Riksbank. Equity futures higher after positive earnings from FB, Qualcomm, and crude is higher for a 2nd day (68.89 +1.0%) after Macron said the US is likely to withdraw from the Iran nuclear deal and before EIA Nat. gas storage data later this morning. ECB left rates unch as expected, attention turns to Draghi press conf – any hints the ECB is closer to pulling back on stimulus. GOCs  higher, slightly wider vs tsys, June 2028 now benchmark 10Y, 10Y roll 0.1bp wider @ 1.6/1.5. 

News headlines

Macron Says He Thinks Trump Will Pull Out of Iran Nuclear Deal (Bloomberg) French President Emmanuel Macron said he thinks U.S. President Donald Trump will withdraw from the Iran nuclear accord, dealing a blow to the six-nation agreement reached in 2015 and endorsed by world powers. “My view — I don’t know what your president will decide — is that he will get rid of this deal on his own for domestic reasons,” Macron told journalists Wednesday in Washington, adding that he encouraged the American president to stay in the accord during his three-day visit to the U.S. capital.

Investors Want to Know Whether Draghi Is Worried About Economic Momentum (Bloomberg) Mario Draghi’s press conference on Thursday may well feature repeated versions of the same question: how worried is he? From sagging business confidence to falling industrial output, the region seems to be losing economic momentum after the best performance in a decade last year. Yet the European Central Bank president and his colleagues say the expansion in the 19-nation bloc is stabilizing rather than slowing down.

Deutsche Bank Cuts Wall Street Ambition to Focus on Europe (Bloomberg) Deutsche Bank AG is abandoning its ambitions to be a top global securities firm as it embarks on possibly the most sweeping overhaul yet of its struggling investment bank. Germany’s largest lender will scale back U.S. rates sales and trading, reduce the corporate finance business in the U.S. and Asia, and review its global equities business with a view toward cutting it back, the bank said in a statement Thursday. The measures will lead to a “significant reduction” in the roughly 97,100-person workforce this year, it said.

Stocks Advance as Results Roll In; Treasuries Jump: Markets Wrap (Bloomberg) U.S. equity futures pointed to a higher open with strong earnings lifting Facebook Inc. and Qualcomm Corp., though gains were muted as investors remained cautious about the prospects for future growth. The euro stayed higher as the ECB kept interest rates unchanged. With the common currency holding gains ahead of a press conference from ECB President Mario Draghi, the dollar pulled back from a three-month high. The pound gained alongside the yen. European bonds tracked a jump in Treasuries, with the yield on 10-year U.S. notes falling below 3 percent.

Facebook Sales Top Estimates, Fueled by Ads; Shares Jump (Bloomberg) Facebook Inc. has been embroiled in one controversy after another. But ad sales are near records and users keep flocking to the social network. First-quarter revenue rose 49 percent to $11.97 billion, beating the $11.4 billion average analyst projection, according to data compiled by Bloomberg. In a statement Wednesday, Facebook said it now has 1.45 billion daily users, matching estimates on this key measure of engagement. Shares surged more than 5 percent in extended trading.

TSX futures higher as oil prices rise (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Thursday as oil prices gained on concerns over renewed U.S. sanctions on Iran and falling Venezuelan output. June futures on the S&P TSX index SXFc1 were up 0.11 percent at 7:15 a.m. ET. Canada’s main stock index rose on Wednesday as higher oil prices boosted energy shares, offsetting investor worries about higher bond yields. Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.15 percent at 7:15 a.m. ET, while S&P 500 e-mini futures Esc1 rose 0.22 percent and Nasdaq 100 e-mini futures NQc1 were 0.62 percent higher. [.N]

Freeland slams U.S. on sunset clause, steel as NAFTA talks heat up (BNN) Canada and the U.S. have had a testy exchange over the idea of including a termination clause in NAFTA, with this idea of a so-called sunset clause emerging as a late-stage sticking point in the negotiations. The U.S. has revived the sunset proposal. In the late stages of bargaining, with hopes of a deal within days, sources say the United States has made clear it wants some sort of additional mechanism allowing the easy termination of NAFTA after several years.

Canada’s economy is ‘finally positive’: Poloz (BNN) Bank of Canada Governor Stephen Poloz said on Wednesday the economy was « finally positive » after a long adjustment to a sharp fall in oil prices, but he added there was still softness in several areas of the country. Poloz also told the Senate’s banking committee that while interest rates would go up from their current low levels, moving too quickly could create a financial stability risk. The central bank has hiked three times since last July as the economy improves and the unemployment rate hovers around 40-year lows. It held rates steady last week at 1.25 per cent. 

Overnight markets

Overview: US 10yr note futures are up 0.197% at 119-10, S&P 500 futures are up 0.31% at 2652.75, Crude oil futures are up 0.88% at $68.65, Gold futures are up 0.17% at $1325.1, DXY is up 0.07% at 91.233, CAD/USD is down -0.12% at 0.7793.

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