Commentaires

Market Update US tsys are trading lower on above avg volume (400k TY fut), 10Y 2.80% (+2bps) on risk on after China pres Xi agreed to reduce certain import tariffs, as well as opening up sectors and expand trade with the US. Global stocks are on the rebound – Euro Stoxx +0.5% while S&P futures are +28 (1.1%). German bunds reversed earlier gains after ECB member Nowotny said the ECB could lift rates and end bond buys this yr.  The euro spiked on the comments, rising to a one -week high vs the USD.  Dallas Fed Kaplan (non voter) said he would prefer not to hike rates into flat or inverted tsy yield curve , while noting trade issues could have a ‘chilling effect’ on the economy.   GOCs are trading lower & 2bps wider vs tsys, the CAD at a six-week high 1.2655. Provis opening 1bp tighter from yest close , Ont 27 69/68, Ont 48/27 roll trading up at 12.5. 

News headlines

Xi Warns Against Returning to a ‘Cold War Mentality’ (Bloomberg) Chinese President Xi Jinping reiterated pledges to open sectors from banking to auto manufacturing in a speech that also warned against returning to a “Cold War mentality” amid trade disputes with U.S. counterpart Donald Trump. Xi pledged a “new phase of opening up” in his keynote address Tuesday to the Boao Forum for Asia, China’s answer to Davos. While the speech offered little new policy, Xi affirmed or expanded on proposals to increase imports, lower foreign-ownership limits on manufacturing and expand protection to intellectual property — all central issues in Trump’s trade gripes.

Russia Axes Bond Auction as Sanctions, Syria Risk Batter Ruble (Bloomberg) Russia’s currency plunged to the weakest level since December 2016 and the government canceled a bond auction as the toughest U.S. sanctions yet combined with an escalation in tensions over Syria to rattle investor sentiment. The ruble dropped 3.6 percent to 62.86 versus the dollar, taking its slump this week to 7.5 percent. The Finance Ministry cited unfavorable market conditions in its first decision to scrap a debt sale since August 2015. Exporters that benefit from a weaker currency led Russia’s benchmark stock index higher after its sharpest collapse on Monday since Russia annexed Crimea in 2014.

Trump Escalates Mueller Criticism, Calling Probe Attack on U.S. (Bloomberg) Donald Trump escalated his criticism of Special Counsel Robert Mueller’s Russia investigation and Attorney General Jeff Sessions following a raid on the office of the president’s personal attorney, describing the probe as an attack on the U.S. The FBI raid on Monday, which was approved by Deputy Attorney General Rod Rosenstein, represents “a whole new level of unfairness” in Mueller’s investigation, Trump complained to reporters in a meeting with military leaders.

Traders Turn Risk-On as U.S.-China Standoff Eases: Markets Wrap (Bloomberg) Risk appetite returned to markets on Tuesday after China’s President Xi Jinping struck a conciliatory tone on trade during a major address. Stocks in Asia and Europe rallied and U.S. equity index futures jumped, while some safe-haven assets retreated. The Stoxx Europe 600 Index followed shares from Sydney to Hong Kong higher alongside oil and metals. Xi said Cold War and zero-sum mentalities were “out of place,” and backed free trade and dialogue to resolve disputes. Treasuries extended declines with the yen, while gold pared a drop to trade little changed. European government bonds were broadly stable.

Canada explores options as Kinder Morgan halts pipeline work (Reuters) The Canadian government on Monday said it was considering all its options on the Trans Mountain pipeline expansion, including a possible investment of public funds to ensure construction goes ahead, after Kinder Morgan Canada halted most work on the project and set a May 31 deadline to scrap the plan.

TSX futures rise as trade dispute fears ease (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Tuesday as Chinese President Xi Jinping’s promise to lower import tariffs eased concerns about a Sino-U.S. trade war. Xi said China will sharply widen market access for foreign investors, a chief complaint of the country’s trading partners and a point of contention for U.S. President Donald Trump’s administration, which has threatened billions of dollars in tariffs on Chinese goods.

Saskatchewan’s new Premier Scott Moe to deliver first budget (BNN) Questions about what kind of budget Saskatchewan’s new premier plans to deliver will be answered today. Scott Moe has promised to balance the provincial budget by 2020, even after reinstating an exemption of the provincial sales tax on crop, life and health insurance earlier this year. Finance Minister Donna Harpauer will deliver the budget later today in the legislature.

Overnight markets

Overview: US 10yr note futures are down -0.116% at 120-25, S&P 500 futures are up 1.13% at 2648.5, Crude oil futures are up 2.1% at $64.75, Gold futures are up 0.02% at $1340.4, DXY is down -0.28% at 89.589, CAD/USD is down -0.27% at 0.7897.

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 US tsys trading lower, below avg volume in TY futures (265k), 10Y 2.79 (+1.8bps), trade tensions the focus with China said to be weighing depreciation of the yuan. US equity futures rebounding (S&P +15), USD index firmer, crude higher 62.75.  US eco data week highlighted by   PPI Tuesday & CPI Wednesday. Chicago Fed Pres Evans said the Fed should raise rates again in June if inflation reaches 2%. In Canada, GOCs are lower , outperforming tsys across the curve.  BOC  Q1 Senior Loan Officer Survey & Business Outlook scheduled for later this morn –  Q4 BOS  revealed the tightest capacity pressures in 10 yrs,  while labor shortage intensity was ‘elevated’. Provincial spreads widened  2-4bps last week driven by ‘risk off’ and a resumption in issuance with $1,55bln sold including a new 10Y Sep 2028 from Quebec @ 65.5 (67.5/66.5). 

News headlines

China Is Studying Yuan Devaluation as a Tool in Trade Spat (Bloomberg) China is evaluating the potential impact of a gradual yuan depreciation, people familiar with the matter said, as the country’s leaders weigh their options in a trade spat with U.S. President Donald Trump that has roiled financial markets worldwide. Senior Chinese officials are studying a two-pronged analysis of the yuan that was prepared by the government, the people said. One part looks at the effect of using the currency as a tool in trade negotiations with the U.S., while a second part examines what would happen if China devalues the yuan to offset the impact of any trade deal that curbs exports.

Stocks Tumble More Than 2% on Trump Trade Jabs: Markets Wrap (Bloomberg) U.S. stocks ended the week with a deep selloff, leaving them lower for the five days as the White House’s latest trade bluster rattled global financial markets. The S&P 500 Index plunged more than 2 percent and all 30 members of the Dow Jones Industrial Average retreated as President Donald Trump ordered a review of additional tariffs that prompted an aggressive response from China. Fresh attempts by White House officials to tone down the bluster failed to calm nerves, with the Cboe Volatility Index back above 21. Treasury Secretary Steven Mnuchin added to the anxiety by saying there’s a “level of risk” the spat could worsen.

Britons Back Holding a Vote on May’s Brexit Deal (Bloomberg) A majority of Britons support holding a vote on the final Brexit deal secured by Prime Minister Theresa May, according to a YouGov poll conducted for the pro-remain group Best for Britain. Those saying the public should have the final say on whether to accept the Brexit deal or remain in the European Union exceeded opponents by 8 percentage points, according to the poll results released on Monday by the group, whose funders include billionaire investor George Soros. Respondents said they would opt to remain in the bloc if given a second referendum.

What to Watch in Commodities: Aluminum, Trump Vs Xi, Copper, Soy (Bloomberg) We live in interesting times. Just as investors weigh up the U.S.-China trade punch-up, markets need to adjust to a whole new front. U.S. sanctions against Russian companies and oligarchs are upending aluminum. The metal’s surging, while shares in United Co. Rusal are in the grinder. What should we expect this week? And what does it mean for Glencore Plc?

No NAFTA deal in principle to be announced at Lima summit (Reuters) Talks to rework the North American Free Trade Agreement (NAFTA) are not advanced enough for the United States, Mexico and Canada to announce a deal “in principle” at this month’s Summit of the Americas in Lima, according to two people familiar with matter. The ministers responsible for NAFTA met on Friday in Washington, and said progress had been made on reworking the accord. But there was still too much to do unveil an agreement at the April 13-14 summit, the sources said, speaking on condition of anonymity due to the sensitivity of the matter.

Futures rise on oil gains, U.S. soothes trade fears (Reuters) Futures for Canada’s main stock index pointed to a higher opening on Monday after oil prices rose and officials in U.S. President Donald Trump’s administration played down fears of a trade war with China. Trump’s chief economic adviser, National Economic Council Director Larry Kudlow said in an interview on Sunday the ongoing spat “might turn out to be very benign”. June futures on the S&P TSX index SXFc1 were up 0.73 percent at 7:15 a.m. ET. Canada’s main stock index fell on Friday in a broad-based decline led by energy and financial shares as renewed U.S.-China trade tensions stoked investors’ worries. Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.66 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were up 0.57 percent and Nasdaq 100 e-mini futures NQc1 were up 0.77 percent.

Canadian Tire expands loyalty program to cover more retail brands (BNN) Canadian Tire Corp. says it’s expanding its loyalty program to allow customers to collect and redeem Canadian Tire Money across its various retail brands. The company says starting later this spring, customers will be able to collect points at Sport Chek, Mark’s, Atmosphere and Gas+ locations in addition to Canadian Tire itself, as well as redeem them at locations other than Gas+ stations. Canadian Tire says the revamped program will be called Triangle and include both loyalty points and two new MasterCards issued under the program. The program will allow customers to collect points either through an app or a loyalty card that will also offer personalized content and offers, while purchases with the branded MasterCards gives additional points.

Overnight markets

Overview: US 10yr note futures are down -0.103% at 120-29, S&P 500 futures are up 0.42% at 2616.75, Crude oil futures are up 0.81% at $62.56, Gold futures are down -0.11% at $1334.6, DXY is up 0.01% at 90.114, CAD/USD is down 0% at 0.7823.

US Economic Data

There is no US economic data for today.

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 US tsys trading higher, yields 0.5-1.5bps lower with the 10Y 2.815(-1.5), relatively muted rally on moderate volume in TY futures after Trump announced he is considering $100bln in additional tariffs on China..  US equity futures lower but off the lows, S&P -27 (-0.90%), Nasdaq -75 (-1.4%). German bunds higher in line with tsys, EZ stocks  -0.73%.  Employment data in the US  at 8:30 , 185k forecast increase in payrolls after 313k in Feb,  with AHE expected to at 2.7% last month. In Canada, GOCs opening higher in line with tsys ahead of  March employment data (+20K vs 15.4k  Feb). Focus on wages with the unemployment rate having fallen to a new low 5.8% in Feb, while wages for permanent workers above 3.0% in Jan/Feb. 

News headlines

China Vows to Fight Trump Tariffs ‘to the End’ as Tension Rises (Bloomberg) China said it would counter U.S. protectionism « to the end, and at any cost, » as a war of words over President Donald Trump’s proposed tariffs on Chinese imports escalated. The statement from Beijing came after Trump ordered his administration to consider tariffs on an additional $100 billion in Chinese goods on Thursday, sending U.S. stock futures tumbling. The U.S. president cited “China’s unfair retaliation” in response to his list of proposed tariffs earlier this week covering $50 billion in Chinese products.

Bond Bears Renewing Attack on 3% May Find Ammo in Jobs Report (Bloomberg) Treasuries are back in selloff mode and some investors who remained bearish even in the face of trade-war angst and tumbling stocks say Friday’s U.S. jobs report may propel yields higher still.

Trade Tension Sinks Stocks; Treasuries Advance: Markets Wrap (Bloomberg) European shares fell with U.S. futures after President Donald Trump’s latest threat to target Chinese imports. Treasuries climbed and commodities fell. Carmakers and miners were the biggest losers in the Stocks Europe 600 Index after Trump ordered his administration to consider tariffs on an additional $100 billion worth of Chinese imports. The offshore yuan slid amid a holiday on the mainland as China responded saying it would counter U.S. protectionism “to the end, and at any cost.” Futures on the S&P 500 declined following three days of gains for the index. Gold and the Japanese yen handed back earlier gains, while the dollar headed for a second weekly advance.

Oil Thwarted by Trade War Fears as Trump Doubles Down on Tariffs (Bloomberg) Oil headed for its worst week in more than a month after U.S. President Donald Trump called for tariffs on more Chinese goods, souring investor optimism that tensions between the world’s two largest economies will ease with negotiations.

TSX futures dip on trade war fears after Trump’s threat (Reuters) Stock futures pointed to a lower opening for Canada’s main stock index on Friday after U.S. President Donald Trump warned of more tariffs on China, fanning fears of a trade war between the two countries. China said it would fight back with fresh trade measures if the United States continues with protectionism, hours after Trump threatened to slap an additional $100 billion in tariffs on Chinese goods.

NAFTA nations ‘moving forward in significant way’: Canada’s Trudeau (Reuters) The United States, Mexico and Canada are “moving forward in a significant way” at talks to modernize the NAFTA trade pact, Canadian Prime Minister Justin Trudeau said on Thursday. Trudeau’s remarks to reporters in Quebec City were the latest in a series of upbeat comments by officials in the three countries about the chances of striking some kind of deal soon on the North American Free Trade Agreement. “I believe we’re in a moment where we’re moving forward in a significant way. Hopefully there will be some good news coming,” Trudeau said.

Canada’s trade deficit unexpectedly grows to $2.69B in February (BNN) Canada’s trade deficit unexpectedly rose to $2.69 billion in February from $1.94 billion in January as imports grew much faster than exports, Statistics Canada data indicated on Thursday. The deficit was larger than the $2.00 billion shortfall predicted by analysts in a Reuters poll. Canada has only recorded two monthly trade surpluses since October 2014. Imports rose by 1.9 per cent on a 15.4 per cent surge in shipments of energy products, pushed up by higher demand for crude oil and crude bitumen. Imports of motor vehicles and parts climbed by 1.7 per cent after unusual auto plant shutdowns had crimped demand in January.

Overnight markets

Overview: US 10yr note futures are up 0.078% at 120-21, S&P 500 futures are down -0.93% at 2637, Crude oil futures are down -0.88% at $62.98, Gold futures are down -0.18% at $1326.1, DXY is up 0.02% at 90.48, CAD/USD is up 0.32% at 0.7817.

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