Commentaires

Market Update

Tsys opening NY lower, US 10Y 2.197 (+2.4bps), curve 1bp steeper before Comey testimony later this morning. Core EGBs lower – the ECB dropped a reference to further interest rate cuts as expected – press conference at 9:00ET. Bunds were already trading weaker prior to ECB, Bund-BTP spread 7bps tighter as early election seems less likely after law failed to pass in parliament, also Reuters reported that Italian banks are combining to inject E1.2bln into Venetian banks. Gilts weaker led by 10Y 1.03% (+3bps) – latest polls showed Tories actually increasing their lead ahead of today’s vote.  Crude continuing lower, down 0.50% after yesterday’s 5% plunge on DOE data which showed both gasoline and crude inventories rising. GOCs opening lower, curve slightly steeper – longs experiencing  buyer fatigue yest after 10s30s traded below 60bps and long Alberta deal.

 News headlines 

Investors Avoid Big Moves as Key Events Draw Near: Markets Wrap (Bloomberg) Financial markets were mostly steady as investors avoided adding big positions ahead of key events in Europe and the U.S. As British voters head to polls in a general election, the pound and government bonds weakened as the risks of shock outcomes weighed on sentiment.

Oil crawls off one-month lows, but supply gloom caps gains (Reuters) Oil edged up on Thursday, having hit one-month lows the previous day after an unexpected surge in U.S. inventories and the return of more Nigerian crude to an already oversupplied market. The oil price has slipped below $50 a barrel despite a pledge by the world’s largest exporters to extend an existing output cut of 1.8 million barrels per day (bpd) into next year in an effort to reduce bulging global inventories.

ECB to keep taps open as economic outlook uncertain (Reuters) The European Central Bank is likely to keep the money taps fully open at its meeting on Thursday as inflation remains below its target despite stronger economic growth in the euro zone. The currency bloc’s economy has been on its best run for a decade but ECB President Mario Draghi is yet to be convinced that the recent rebound in inflation is durable because wage growth remains sluggish.

Euro zone growth revised up to highest rate in a year in first quarter (Reuters) The euro zone economy grew by more than previously estimated in the first quarter and at its fastest rate in a year, EU statistics agency Eurostat said on Thursday, ahead of a European Central Bank meeting likely to keep policy unchanged.

Canadian non-mortgage debt hits $21,696 as Alberta consumers struggle (TheGlobeAndMail) A new report from credit-monitoring agency TransUnion has found that Canadians are taking on consumer debt in a healthy way – except in Alberta and other oil-dependent regions.

Quebec’s strategy on electric vehicles is too expensive, Ecofiscal says (TheGlobeAndMail) Quebec’s subsidy for consumer purchases of electric vehicles is an extremely expensive way of reducing greenhouse gas emissions, with the cost calculated at $395 per tonne of carbon dioxide eliminated, Ecofiscal Commission says in a report to be released on Thursday.

Overnight markets 

Overview: US 10yr note futures are down -0.111% at 126-13, S&P 500 futures are up 0.07% at 2431.5, Crude oil futures are down -0.98% at $45.27, Gold futures are down -0.62% at $1285.2, DXY is up 0.2% at 96.943, CAD/USD is down -0.01% at 0.7404.

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

Tsys lower, yields ~1bp higher , 10Y 2.154%, on avg. volume in TY futures (240k). European stocks are higher, S&P futures up 1.25, crude off 0.64% after API data  showed a rise in gas supplies and after yesterday’s sharp rally.  DOE crude inventories due at 10:00am. EGBs also lower, peripheral yields 2-3bps higher before ECB meeting tomorrow.  In FX, the euro is off 0.43% as the ECB is preparing to cut its outlook for inflation according to a BB story, thou it is still expected to change its forward guidance  in view of the improved eco outlook. GOCs slightly lower, 10Y 1.40%, provis opening unchanged.

News headlines 

Haven Flight Ebbs as ECB Spurs Stocks, Sinks Euro: Markets Wrap (Bloomberg) Markets appeared to shrug off the risks surrounding a series of key events this week, as the threat of a more-hawkish ECB receded and boosted stocks, while a troubled Spanish bank was rescued.

Oil dips on concerns about rising U.S. output, OPEC tensions (Reuters) Oil prices dipped on Wednesday on renewed concerns about the efficacy of OPEC-led production cuts due to rising tensions within the export group over Qatar and growing U.S. output.

Global growth headed for six-year high: OECD (Reuters) The global economy is on course this year for its fastest growth in six years as a rebound in trade helps offset a weaker outlook in the United States, the OECD forecast on Wednesday. The global economy is set to grow 3.5 percent this year before nudging up to 3.6 percent in 2018, the Paris-based Organisation for Economic Cooperation and Development said, updating its forecasts in its latest Economic Outlook.

Pound Is Seen Losing the Most If U.K. Vote Delivers No Winner (Bloomberg) The pound could plunge to as low as $1.20 on Friday, a level last seen in January, should the U.K. snap election lead to a hung parliament, according to a Bloomberg poll of analysts.

After oilsands divestments, Shell Canada refocuses on gas, chemicals and renewables (Bloomberg) Shell Canada Ltd. will soon announce a project to turn vegetable products into diesel fuel in Alberta, as part of the company’s transition to produce less oil and more energy from natural gas, renewables and chemicals.

Dollarama profit climbs 13.9 per cent (TheGlobeAndMail) Canadian dollar-store operator Dollarama Inc reported a 13.9 per cent increase in quarterly profit on Wednesday as customers on average spent more at its stores. The Montreal-based company’s net income rose to $94.7-million or 82 cents per share in the first quarter ended April 30, from $83.2-million or 68 cents per share, a year earlier.

Overnight markets 

Overview: US 10yr note futures are down 0% at 126-25, S&P 500 futures are up 0.03% at 2431.5, Crude oil futures are down -1.1% at $47.66, Gold futures are down -0.25% at $1294.3, DXY is up 0.2% at 96.825, CAD/USD is down -0.01% at 0.7433.

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

Tsys opening higher& flatter, yields 1.5 – 4.0 bps lower, US 10Y 2.142% on safe haven bid with EGBs. Euro stocks lower along with crude, gold approaching April highs @ 1295, USD . Risk off mood in front of Thursday’s Comey testimony, ECB & UK election supporting sharp rise in gilts, bunds higher, 10Y gilt below 1.0% for the first time since Oct , 0.98%. China is ready to buy more tsys according to BB story as yields said to be more attractive vs other sov debt.  GOCs higher, lagging the rally in tsys by ~1bp, 2s10s flattest since Nov. Provis closed yest 0.5bps wider, long Ont, PQs well bid on screens – this morn spds unch. NVCC debt rallying 5-10 bps yest on decision by FTSE TMX to include bonds in index as of July 1st.

News headlines 

Havens Rally as Risk Events Stack Up; Oil Swings: Markets Wrap (Bloomberg) Caution reigned across markets in a week loaded with risk events, from former FBI chief James Comey’s congressional testimony to the ECB’s policy meeting and Britain’s increasingly uncertain election. Havens including gold, the yen and Treasuries gained while stocks retreated.

U.K. stocks slip as polls turn up election nerves (MarketWatch) U.K. stocks declined for a second straight day on Tuesday, as investors remained cautious ahead of the U.K. general election on Thursday, as polls point to an increasingly tight race. The FTSE 100 index UKX, -0.22%  fell 0.2% to 7,510.19, building on a 0.3% loss from Monday.

Oil slips on worries Mideast rift could undermine OPEC cuts (Reuters) Oil prices slipped further below $50 a barrel on Tuesday on concerns that a diplomatic rift between Qatar and several Arab states including Saudi Arabia could undermine efforts by OPEC to tighten the market.

UK must speak up to preserve global markets role after Brexit: ICE CEO (Reuters) Britain must show its support for markets with measures such as keeping taxes low if it wants to remain a top global financial center after Brexit, Intercontinental Exchange (ICE.N) Chairman and Chief Executive Jeff Sprecher said on Tuesday.

Rob Merrifield: Politicians killed Canada’s low-dollar advantage by piling on carbon taxes and environmental red tape (FinancialPost) A lot of talk on trade relations between Canada and the United States risks missing the forest for the trees. Understandably, the NAFTA renegotiation is top of mind for folks in trade circles and within these discussions we easily end up focusing on specific trade irritants such as supply management, softwood lumber, wheat grading, rules of origin, and more.

Shareholders to settle GM’s fight with activist investor (TheGlobeAndMail) General Motors’ normally tranquil annual meeting could be a contentious affair this year, as an activist investor targets GM’s stagnant stock price. The nation’s No. 1 auto maker has posted more than $42-billion in profits over the past seven years. Yet the stock has stubbornly hovered near its $33 initial offering price from November 2010.

Overnight markets 

Overview: US 10yr note futures are up 0.272% at 126-26, S&P 500 futures are down -0.25% at 2428.5, Crude oil futures are down -0.44% at $47.19, Gold futures are up 0.95% at $1294.9, DXY is down -0.08% at 96.726, CAD/USD is down -0.01% at 0.7423.

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