Commentaires

Market Update

Tsys trading higher, yields 1bp lower with the US 10Y 2.243 (-1.1bps), higher than avg volume in TY futures.  Tsy, EGB yields fell initially o/n on news of terrorist attack in UK, then gave much of it back after firm eco data & sov supply.  German IFO rose to the highest since 1991 in May while German Man PMI rose to 59.4 in May. GOCs higher, 10Y 1.46%, outperforming tsys in 10s & longs. Provi spds narrowed ~3bps last week , most of that on announcement of the Muskrat Falls deal. All in yields on provis lower by 12-15bps last week. CNQ (Baa3/BBB+) in the US mkt with benchmark 5,10 & 30Y – IPT 140,185 & 230. The CAD CNQ 22s @ 140 swap to USD @ tsys + 130 – so this looks to be 10bps concession for the 5Y.

News headlines

European Stocks Gain on Solid Data; Crude Retreats: Markets Wrap (Bloomberg) European stocks advanced as data from Germany and France signaled that the region’s economic recovery remains on track. U.K. assets showed resilience in the wake of a suicide bomb attack.

Oil prices fall on White House proposal to sell U.S. oil reserves (Reuters) Oil prices fell on Tuesday, weighed down by U.S. President Donald Trump’s plan to sell off half the country’s huge oil stockpile, threatening a future glut even as OPEC and its allies cut output to try and tighten the market.

China to open more sectors to foreign investors (Reuters) China will further open its economy to foreign investors, through measures such as allowing investment in more industries, such as services, state television said on Tuesday, citing a reform group meeting chaired by President Xi Jinping.

OPEC set to prolong oil cuts as delegates predict smooth meeting (Reuters) OPEC will likely agree to extend production cuts for another nine months, delegates said on Tuesday as the oil producer group meets this week to debate how to tackle a global glut of crude.

Bond market braces for impact of New York’s free tuition plan (Reuters) Little known private colleges that are already struggling to grow their revenues are facing a new threat that could further weaken their finances and make borrowing harder: free tuition at public universities.

HSBC Makes a ‘Big Bet’ on Canada in Bid for More Market Share (Bloomberg) HSBC Holdings Plc is getting aggressive in Canada — and one needs to look no further than its latest mortgage rate for proof of broader ambitions. HSBC Canada is offering five-year fixed-term mortgages at 2.39 percent, undercutting the lowest discretionary rates at the largest domestic lenders including Toronto-Dominion Bank and Royal Bank of Canada.

Overnight markets 

Overview: US 10yr note futures are up 0.062% at 126-07, S&P 500 futures are up 0.11% at 2395.5, Crude oil futures are down -0.04% at $51.11, Gold futures are down -0.01% at $1261.3, DXY is down -0.01% at 96.974, CAD/USD is down -0.26% at 0.7425.

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 trading weaker , curve steeper out to tens, 10Y 2.25% (+2bps), longs outperforming on avg volume in TY futures esp compared to the last couple of days. Euro stocks  higher, S&P mini +5pts, crude +1.2% @ 49.95. Tsys in a narrow range overnite, fading in Europe with EGBs.  10Y bund yield 0.364% (+2.3bps) , rally in peripheral spds continues with rumoured short covering in BTPs and outright buying in cash, 10Y BTP/Bund spd 175bps back to lows of early March. GOCs lower, outperforming after Apr Cdn CPI came in below exp 1.3% vs 1.4% in the core, 10Y 1.46%. Longs seeing good support all week, 10s30s 4bps flatter since the long auction wed on rumoured foreign buying, long rolls also flatter. Provis well bid since yest morning Ont 48 deal @ 88.5, which closed 85.5 bid on news Muskrat Falls had been assigned a AAA rating from Moodys. This morning spds  are in another 0.5-1bps.  In corps, weve seen demand for ABIBB & AT&T 7Y maples this week, the latter vs deposit notes. Enbridge in the mkt with a 2Y FRn @ CDOR + 59bps.

News headlines 

Stocks Steady After Volatile Week; Crude Rises: Markets Wrap (Bloomberg) Global equities showed signs of stabilizing at the end of a turbulent week in which investors confronted political crises in Washington and Brazil. Oil headed for a second weekly gain as OPEC members supported Saudi Arabian and Russian pledges to extend supply cuts.

Oil prices climb on hopes output cuts will be extended (Reuters) Oil futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

OPEC Reality: Saudis Delivered, Non-OPEC Didn’t (Bloomberg) Just under a week from now, the Organization of Petroleum Exporting Countries will meet in Vienna to decide whether to extend the first oil production curbs in eight years in order to eliminate a glut. The group will evaluate data, described below, that highlights two key details: First, Saudi Arabia is shouldering much of the burden. Second, non-member producers – who pledged reductions of their own – haven’t delivered in full.

TPP trade deal members seek to move ahead without United States (Reuters) Remaining members of the Trans Pacific Partnership (TPP) free trade agreement are working on a statement to reaffirm their commitment to it despite the withdrawal of the United States, sources close to the discussions said.

ECB cannot ‘run the economy hot’ to create jobs: Coeure (Reuters) The European Central Bank cannot risk running « the economy hot » to support employment once inflation stabilizes at its target of almost 2 percent, ECB Executive Board member Benoit Coeure said on Friday.

Cheap Gas Drilling Rouses Canada’s Permian of the North (Bloomberg) Drilling rigs and roughnecks are hot commodities once again across the Montney shale formation in northern British Columbia and Alberta, and companies like Grimes Well Servicing Ltd. are having a hard time keeping up with demand.

 Overnight markets 

Overview: US 10yr note futures are down -0.049% at 126-07, S&P 500 futures are up 0.29% at 2370.25, Crude oil futures are up 1.48% at $50.08, Gold futures are up 0.03% at $1253.2, DXY is down -0.53% at 97.363, CAD/USD is down -0.16% at 0.7363.

US Economic Data

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Market Update

Tsys higher again this morning on risk-off, volume in TY futures ~3x avg, 750k , US 10Y below 2.20% for the first time in a month, Dow futs -European stocks lower-  stoxx -1.0% led by banks -2%. Brazil real fell 5.3% at the open, Brazil stk futures down 10% while the govt has canceled its planned . Core European bonds higher, peripherals outperforming  – 10Y Port/Bund 280 bps new low,  10Y bund 2.10% (-3.4bps), 10Y bund/tsy spd 187 bps also close to recent tights.  Gilts higher, third day in a row despite higher than exp UK inflation and today’s strong Apr retail sales, 10Y gilt 1.034% one month low.  GOCs higher led by longs 2s/30s 2bps flatter, 10Y 1.434%. Provis spds wider 1-3bps yest, this morn another 0.5bps wider.

News headlines 

Global Stocks Plunge After U.S. Rout as Bonds Gain: Markets Wrap (Bloomberg) European and Asian equity markets slumped in the wake of the worst day in eight months for U.S. stocks as the political crisis engulfing U.S. President Donald Trump’s administration drove investors to the safety of bonds. Shares across Europe extended declines following new revelations about undisclosed contacts between Trump’s campaign and the Kremlin. The Justice Department Wednesday appointed a special counsel to probe Russia’s role in the 2016 election, deepening a crisis fueled by reports Trump asked FBI Director James Comey in February to halt an investigation before firing him last week.

Australia’s jobs growth tops forecasts in April (FinancialTimes) The Australian dollar jumped back into positive territory after data showed employment rose more than expected in April and the jobless rate fell to its equal-lowest level this year. That is despite concerns in recent months about the health of the labour market, particularly stagnant wage growth.

Canadian provincial borrowers receive friendly welcome in Britain (FinancialPost) Britain in May is great for a sports fan, for garden enthusiasts and for theatre goers — though speaking personally, July is even better. Canadian borrowers have found attractions in other areas and through those efforts have located a group of willing fixed-income investors interested in buying well-rated paper.

Japan economic growth picks up speed (MarketWatch) Japan’s economy picked up speed in the first three months of 2017, extending its most recent stretch of growth under Prime Minister Shinzo Abe to five quarters, the longest expansion in Japan since 2006. Stronger global demand, especially for tech-related items, and an improvement in household spending helped gross domestic product beat forecasts and rise 2.2% on an annualized basis from the previous three months, according to preliminary figures released Thursday.

Wal-Mart’s comparable sales beat estimates (TheGlobeAndMail) Wal-Mart Stores Inc reported higher-than-expected quarterly comparable sales on Thursday, helped by greater traffic at Wal-Mart and Sam’s Club stores and a rise in online sales. Sales at U.S. stores open at least a year rose 1.4 per cent in the first quarter, excluding fuel. Analysts polled by research firm Consesus Metrix had forecast a rise of 1.3 per cent

Google shifts mobile focus to apps and digital assistant (Reuters) Mobile phone apps took center stage at Google’s annual developer conference on Wednesday as the search giant announced new features for its digital assistant and its popular photo app while devoting little time to the Android mobile operating system.

Overnight markets 

Overview: US 10yr note futures are up 0.037% at 126-15, S&P 500 futures are down -0.37% at 2348.75, Crude oil futures are down -1.24% at $48.46, Gold futures are down -0.06% at $1258, DXY is up 0.14% at 97.713, CAD/USD is up 0.16% at 0.734.

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