Commentaires

Market Update

Tsys trading lower, curve 0.5bps steeper, US 10Y 2.171 (+1.2bps) , 3bps off the post non-farm low, on low volume  in TY1 futs (221K). German bunds, UK gilts also lower despite weekend terror attack, ECB & UK election risks. Crude off 0.30 @ 47.37, giving up earlier gains inspired by Arab states severing ties with Qatar. ECB meting Thursday – no change in policy expected despite firmer data of late, euro/bund volatility remain low as forward guidance not expected to change much. GOCs lower, long end outperforming in continuation from Friday – 5s/30s flattest since mid Oct – index buying a factor supporting longs & longer term provis – Ont 48/27 trading up @ 9.5 this morn.

News headlines 

Europe Stocks Slip With Metals; Pound Erases Drop: Markets Wrap (Bloomberg) European stocks headed for the first drop in three days as a selloff in industrial metals weighed on mining shares. The weekend’s terror attack in London couldn’t hold back the pound, which erased a loss to strengthen ahead of the U.K. election. Miners were the biggest losers as the Stoxx Europe 600 Index retreated, while zinc and tin led base metals lower. Treasury yields increased from the lowest since November.

Oil prices dip on fears Middle East spat could harm OPEC cuts (Reuters) Oil prices reversed gains to trade down on Monday on concerns that the cutting of ties with Qatar by top crude exporter Saudi Arabia and other Arab states could hamper a global deal to reduce oil production.

China May data to show stable growth as exports stay solid (Reuters) China’s economy is likely to have remained on a stable footing in May, buoyed by solid gains in trade and investment as economic ties with the United States take a positive turn and infrastructure spending cushions domestic growth.

Election jitters and consumer squeeze hit UK services, PMI shows (Reuters) Britain’s services grew more slowly than expected last month as businesses put off investment decisions before this week’s national election and higher inflation squeezed households, a survey showed on Monday.

Macron factor set to leap from presidency to parliament (Reuters) Bastions are crumbling and loyalties shifting ahead of France’s parliamentary elections. Emmanuel Macron, fresh from becoming the youngest French leader since Napoleon, now looks set to redraw the political map with a party he only formed a year ago.

Don’t Bet the House on Poloz Busting Toronto and Vancouver Bubbles (Bloomberg) The old debate about whether central banks should raise rates to counteract housing bubbles is finding new life in Canada as the country copes with runaway prices in its two biggest real estate markets.

Toronto home sales drop most since recession as new rules put brakes on market (FinancialPost) Sales of existing homes across the Greater Toronto Area dropped a whopping 20.3 per cent in May from a year ago, while the average home price in the region fell about six per cent from April, results based on the first full month of data following a major initiative by the Ontario government to cool Canada’s biggest housing market.

Overnight markets 

Overview: US 10yr note futures are down -0.185% at 126-13, S&P 500 futures are down -0.09% at 2435.5, Crude oil futures are down -0.82% at $47.27, Gold futures are up 0.27% at $1283.7, DXY is up 0.2% at 96.912, CAD/USD is up 0.07% at 0.7412.

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 slightly higher, long end outperforming, top of narrow range before non farms, US 10Y 2.203%.  Crude lower, down another 2.0% or 5% w/w, reversing yest gains after US DOE data showed another drawdown in inventories.  Core Euro EGBs higher, gilt yields 0.5-1.5bps lower led by 10Y ,not much direction before key US data. GOCs slightly higher as well, yields ~1bp off 6mnth lows after yesterday’s rally led by longs , 10s30s maintaining flatter bias. Index buying of provis brought spds 1-2bps tighter, CMBs lagged the move closing 1bp tighter.

News headlines 

Global Stocks Rally on Growth Optimism; Oil Drops: Markets Wrap (Bloomberg) Global stocks rallied after private American hiring data bolstered confidence in the global economy. Oil headed for a three-week low as U.S. output expanded. European shares advanced and the MSCI World Index traded at a record following new highs in U.S. benchmark gauges. The dollar held on to gains triggered by a report showing companies added more workers to U.S. payrolls in May than forecast. Oil was poised for the biggest weekly drop since May 5, while industrial metals including copper declined, driving the Bloomberg Commodity Index to the lowest in more than a year.

Oil slides as U.S. climate withdrawal compounds glut concerns (Reuters) Brent crude tumbled below $50 on Friday, heading for a second straight week of losses, on worries that U.S. President Donald Trump’s decision to abandon a climate pact could spark more crude drilling in the United States, worsening a global glut. Benchmark Brent crude futures LCOc1 were off by nearly 3 percent at $49.14 per barrel at 1034 GMT (6:34 a.m. ET), down $1.49 from the previous close.

Yuan ends week on firm footing as market ponders PBOC moves (Reuters) The Chinese yuan ended a holiday-shortened week just off seven-month highs, jumping sharply higher after China’s central bank took aggressive steps to prop up the currency, a move that has left traders and analysts guessing at its motivations. The People’s Bank of China (PBOC) already took markets by surprise last week when it announced it would add an as-yet undefined « counter-cyclical » factor to its daily reference point calculations to overcome depreciation expectations.

Ottawa suspends talks with Boeing over Super Hornet jet purchase (TheGlobeAndMail) The Trudeau government has suspended negotiations with Boeing Co. to purchase fighter planes as it continues to play hardball with the Chicago company over a U.S. trade complaint the firm lodged against Montreal aircraft maker Bombardier Inc. Steven MacKinnon, parliamentary secretary to Public Services and Procurement Minister Judy Foote, announced Thursday that Canada has paused talks with Boeing as the dispute shows no signs of winding down.

Economy, low rates push Canadian auto sales to record (TheGlobeAndMail) Car buyers stomped on the accelerator pedal in Canada last month, sending sales soaring 11 per cent from May, 2016, levels and shattering the monthly record hit in April, 2016. Auto makers delivered 216,861 vehicles in May, only the second time ever that sales have topped 200,000 in a single month – last April was the only previous occasion. That put the total for the first five months of this year 5 per cent ahead of the pace in 2016, which was a record year.

Home Capital trouble has not hit mortgage insurance portfolio, says head of CMHC (FinancialPost) The problems at Home Capital Group Inc. have not led to any noticeable uptick in default rates tracked by the Canada Mortgage and Housing Corporation. According to emails that have come to light since Home Capital’s current liquidity crisis began, CMHC has been aware of potential documentation fraud at the alternative mortgage lender since at least 2015.

Overnight markets 

Overview: US 10yr note futures are up 0.062% at 126-09, S&P 500 futures are up 0.22% at 2434.75, Crude oil futures are down -1.84% at $47.47, Gold futures are down -0.44% at $1264.5, DXY is up 0.09% at 97.283, CAD/USD is up 0.07% at 0.7394.

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 weaker, prices moving lower after stronger ADP (253k vs 180k exp) yields 2bps higher across the curve, 10Y 2.218% . Core Euro bonds lower, gilt yields 2bps higher in 10s  2s unch. Once again gilt underperformance attributed to latest polls showing dwindling lead for conservatives, this time from YouGov. GOCs lower in line with tsys, provis 0.5bps tighter after closing unch yest.

News headlines 

Stocks in Upbeat Mood as Oil Rises, Havens Slip: Markets Wrap (Bloomberg) European stocks were poised to snap a five-day losing streak amid a broad-based rally. The pound declined as better-than-expected manufacturing data failed to offset political risk before the impending election, and crude bounced.

China’s Caixin PMI Dips Below 50 for First Time in 11 Months (Bloomberg) A private gauge of Chinese manufacturing fell back into contractionary territory in May, adding to recent evidence that the economy’s strong start to 2017 is leveling off. Caixin Media and Markit Economics manufacturing purchasing managers’ index fell to 49.6 from 50.3 in April, the lowest reading since June 2016 and below the 50.1 median estimate

Oil Trades Near Two-Week Low Before U.S. Crude Inventory Data (Bloomberg) Oil traded near the lowest level in two weeks as traders waited to see if U.S. government data would confirm industry reports of another drop in crude stockpiles. Futures were little changed in New York, paring an earlier advance of as much as 1.6 percent. U.S. inventories fell by 8.67 million barrels last week, the American Petroleum Institute was said to report. Government data Thursday is forecast to show a slide of 3 million barrels, the eighth straight drop. Output from Libya, exempt from OPEC’s deal to reduce supply, rose to the highest since October 2014 as production from its biggest field increased.

Reuters poll: Conservative win would give UK strongest hand in Brexit talks – analysts (Reuters) A Conservative victory in June 8’s election would give Britain the strongest hand in EU divorce talks and lift sterling, economists polled by Reuters said, although nearly as many felt a coalition government would secure the best Brexit deal. Britons voted nearly a year ago to leave the European Union and Prime Minister Theresa May triggered Article 50 in March, starting a two-year countdown. After earlier saying she would not do so, May then called a snap national election to try to cement her position.

IMF warns of ‘significant’ risks from Canada’s housing market (TheGlobeAndMail) The International Monetary Fund is urging Canada to take further action in order to address rising household debt levels and the risks of a sharp correction in the housing market.

Trump to announce decision on global climate deal on Thursday (Reuters) President Donald Trump said he would announce on Thursday his decision whether to keep the United States in a global pact to fight climate change, as a source close to the matter said he was preparing to pull out of the Paris accord.

Overnight markets 

Overview: US 10yr note futures are down -0.186% at 126-02, S&P 500 futures are up 0.13% at 2414.25, Crude oil futures are up 0.21% at $48.42, Gold futures are down -0.74% at $1266, DXY is up 0.32% at 97.23, CAD/USD is down 0% at 0.7407.

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