Commentaires

Market Update

US tsys lower, under pressure from lower EGBs in reaction to hawkish Draghi comments, US 10Y 2.163 (+2.6bps). Core EGBs sharply lower after Draghi said the global recovery was firming and inflation is being boosted by temporary factors, deflationary forced are being replaced by reflationary ones. 10Y bund yields at a one month high 0.31% (+7bps), 10Y gilt 1.06% (+5.2bps).  European stocks off 0.60%, thou Euro banks are pushing higher on Draghi. The US auctions $34bln in 5Y notes after a solid 2Y yest – highest b/c since Nov 2015, @ 0.5bps thru. GOCs lower, underperforming tsys in the backup by ~1bp, curve 1bp steeper led by 10s, 10Y 1.508%. Provis opening unch, the Ont 28/27 box steeper by 1bp since last week 10.5/10.2, the underlying 10s30s GOC curve continues to narrow, trading up @ 48.3 this morn. New HSBC 5Y dep note 94/92 (priced at 101.9 yest).

News headlines 

Stocks Drop, Commodities Rise; Draghi Spurs Euro: Markets Wrap (Bloomberg) A mood of caution was evident in equity markets Tuesday, with European stocks falling in a broad-based retreat. The euro jumped as bonds and dollar fell after Mario Draghi said headwinds to inflation in the region are temporary.

Euro surges on Draghi comments, dollar slips (Reuters) The euro surged to its highest in over a week against the dollar on Tuesday after European Central Bank President Mario Draghi said factors weighing on inflation in the euro zone were mainly temporary and the Bank could look through them.

Yuan Surges in Afternoon Trade Amid Talk PBOC Supported Currency (Bloomberg) China’s yuan surged both onshore and overseas amid speculation of central bank intervention and a decline in the dollar. The offshore currency jumped as much as 0.7 percent in a sudden afternoon spike, after spending much of the day little changed. The yuan traded in Shanghai’s onshore market climbed 0.5 percent to 6.8100.

U.S. slaps more duties on Canadian lumber shipments (Financial Post) The Canada-U.S. softwood lumber trade dispute intensified Monday after the U.S. Department of Commerce boosted the levy it imposes on Canadian lumber shipments to 26.75 per cent from 19.88 per cent.

Tim Hortons’ U.S. franchisees form alliance as tensions boil (Financial Post) Tim Hortons’ U.S. franchisees are banding together to lobby for corporate-level changes at the coffee chain, which is owned by Restaurant Brands International Inc., the fast-food giant that also runs Burger King.

Google Gets Record $2.7 Billion EU Fine for Skewing Searches (Bloomberg) Google lost its biggest regulatory battle yet, getting a record 2.4 billion-euro ($2.7 billion) fine from European Union enforcers who say the search-engine giant skewed results to thwart smaller shopping search services.

Overnight markets 

Overview: US 10yr note futures are down -0.296% at 126-13, S&P 500 futures are down -0.08% at 2434, Crude oil futures are up 1.31% at $43.95, Gold futures are up 0.27% at $1249.8, DXY is down -0.6% at 96.841, CAD/USD is down -0.24% at 0.7568.

US Economic Data 

Canadian Economic Data 

There is no major economic data release 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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Market Update

US tsys opening slightly weaker out the curve on light volume, 10Y 2.16%, pressured lower with EGBs. UK gilts lower, curve 3bps flatter on hawkish comments from BOE Forbes hat there shouldn’t be delay in raising rates, 2Y gilt 3bps higher @ 0.24% highest since last Nov. Short sterling heavy selling volume in whites/reds (proxy for 2Y). GOCs higher, steeper after CPI came in below exp 0.1%/1.5% vs 0.2%/1.5% exp – CGBs spiked higher but have since retraced most of the move, while the short end is well bid, CAD reeling on the news 1.33 vs 1.3233 cls.

News headlines 

European Shares Struggle; Oil Holds Weekly Loss: Markets Wrap (Bloomberg) European equities slipped, extending the longest run of weekly losses in a year as U.K.-listed stocks struggled on the anniversary of Britain’s vote to leave the European Union. Oil was poised for a fifth week of decline as a supply glut shows no sign of ending.

Oil slide muddies inflation outlook, weighs on stocks (Reuters) World stocks struggled to hold onto earlier gains on Friday and were poised for a flat end to the week following another wobble in energy shares, while a tentative bounce in oil prices helped commodity-related currencies gain against the dollar.

Forget euro zone breakup, sterling now deemed riskier (Reuters) For years the options market that companies and investors use to hedge against big swings in currencies viewed the euro as a bigger political and structural risk than Britain’s pound. In the political and market turmoil immediately before and following Britain’s decision last June to leave the European Union, financial market investors flipped their long-held bias against the euro and now expect sterling to be the riskier party for years to come.

Britain’s finance industry warns of threat from Brexit law changes (Reuters) Britain’s finance industry will warn the government next week to limit ministers’ powers to change legislation when it begins the mammoth task of converting European Union laws into domestic legislation in preparation for its exit from the bloc, according to a draft report seen by Reuters.

Buffett’s Home Capital Bet Backs Turbulent Canada Housing Market (Bloomberg) Warren Buffett’s deal to back Home Capital Group Inc. does more than support a struggling mortgage lender — it’s a vote of confidence for a housing market that everyone from investors to global ratings companies say is a bubble ready to burst.

Canada Ponders an Unusual Drug Problem: a Shortage of Marijuana (Bloomberg) The biggest challenge for Justin Trudeau’s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of Canada’s most-populous province says.

Overnight markets 

Overview: US 10yr note futures are up 0.037% at 126-23, S&P 500 futures are up 0.06% at 2433.25, Crude oil futures are up 0.35% at $42.89, Gold futures are up 0.72% at $1258.4, DXY is down -0.23% at 97.365, CAD/USD is up 0.45% at 0.7522.

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Market Update

US tsys slightly lower, 10Y 2.158% on low volume in TY futures (200k), narrow 4 tick range.  Core EGBs mixed – Bund curve flatter, 5Y +2bps, demand for flatteners , much higher than ag volume in the current 5Y ‘Bobl’ contract, the 5s30s curve 5bps flatter to lowest levels this yr. GOCs lower, curve 2bps flatter after strong April retail sales part the core (1.5% vs 0.7%)curve flatter led by 10s, 5s30s curve 86bps new lows, 10Y roll unch 8.7/8.5 – unch from auction lvls yest.. Provis trading up to start, Ont 27s @74, Ont 48s @ 83.5. Quebec/Ontario 48 -0.6/-1.0 from -0.5 yest – Quebec’s latest fiscal projection shows 2016-17 budget surplus @ 2.5bln vs 250mln forecast in March.

News headlines 

Weakness Persists in Europe Stocks; Gold, Yen Rise: Markets Wrap (Bloomberg) Stocks across Europe were headed for a third day of losses as yet another slump in oil prices on Wednesday fed into markets. Amid a risk-off mood havens were in demand, and the yen gained with precious metals.

Oil prices slip as physical excess overpowers OPEC (Reuters) Oil slid back toward multi-month lows on Thursday, after a brief recovery early in the session, as traders warily eyed a glut of physical supply that has persisted despite OPEC-led efforts to balance the market.

Warren Buffet’s company buys into troubled Home Capital Group (Financial Post) Home Capital Group Inc. (TSX:HCG) says American investment firm Berkshire Hathaway Inc. has agreed to indirectly acquire $400 million of its common shares in a private placement and provide a new $2 billion line of credit to its subsidiary, Home Trust Company.

UK factories have best month for orders since 1988: CBI (Reuters) British factory orders have hit their highest level in nearly 30 years, according to a monthly Confederation of British Industry survey which is likely to encourage Bank of England policymakers who favor an interest rate hike.

Quebec Sees 2016-17 Surplus Swelling Tenfold to C$2.5 Billion (Bloomberg) Quebec’s second straight budget surplus will likely be a whopper. Canada’s second most populous province posted a surplus of C$2.49 billion ($1.87 billion) for the fiscal year ended March 31, according to preliminary data released Thursday by the government. That’s 10 times as large as the C$250 million surplus forecast by Finance Minister Carlos Leitao in his March 28 budget. Final figures will be announced “in the fall,” Leitao told reporters Wednesday.

Yellen’s Future at Fed Resisted by Trump Aides Wanting New Blood (Bloomberg) Federal Reserve Chair Janet Yellen’s candidacy for another term is encountering resistance from some Trump administration advisers who want a new leader at the U.S. central bank, according to two administration officials, even as the Treasury secretary indicated she may still be in the running.

Closed-Door Talks Have Bank of Canada Concerned About Trust (Bloomberg) The Bank of Canada’s top policy makers spoke almost twice as often behind closed doors as they did in public over a three year span, according to an internal review that also said private speeches could undermine public trust.

Overnight markets 

Overview: US 10yr note futures are up 0.037% at 126-23, S&P 500 futures are down -0.07% at 2431.75, Crude oil futures are up 0.75% at $42.85, Gold futures are up 0.58% at $1253, DXY is down -0.04% at 97.522, CAD/USD is down -0.53% at 0.754.

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, David Leclair-Legault

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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