Commentaires

Market Update

Tsys lower after claims & Q1 prod. Data , after a risk on overnite session. US 10Y 2.352% (+3bps), Euro equities at new highs up 0.80%, S&P futures +5.5. Stocks buoyed by polls showing Macron won TV debate ahead of Sunday’s run-off EGBs pressured by strong EU econ data & supply – Eurozone retail sales 0.3% in March vs 0.1% exp Euro Service PMI 56.4 vs 56.2. German 10Y bund yield + 4bps @0.37%. GOCs slightly lower, lagging the pullback in tsys by ~1bp with the curve unch, GOC 10Y 1.56%. Provis unch after closing 0.5bps tighter yest, Alberta 5Y deal exp.

News headlines 

Upbeat Earnings Lift Stocks as Bonds Out of Favor: Markets Wrap (Bloomberg) European stocks rose as earnings reports underscored that the continent’s economy is on the mend. Government bonds extended declines triggered by the Federal Reserve’s policy meeting. Oil fell to the lowest since November.

Oil down on lower than expected drop in U.S. inventories (Reuters) Oil prices fell for the fourth day in a row on Thursday, nearing their lowest level since late March after data showed a lower than expected decline in U.S. inventories. U.S. data showed crude inventories USOILC=ECI fell 930,000 barrels in the week to April 28, against analysts’ expectations for a decrease of 2.3 million barrels. Stocks have steadily declined for the last four weeks, but at 527.8 million barrels they are just 7 million barrels off a record high.

Macron, earnings hopes send European shares to 20-month high (Reuters) Signs that centrist Emmanuel Macron was heading for victory in France’s presidential election and reassuring results from HSBC pushed European shares to a near two-year high on Thursday, despite some wary signals from China and commodity markets.

UK services firms surprise with bounce, homebuyers cautious (Reuters) Britain’s economy picked up some steam in April after slowing in early 2017, a closely-watched survey suggested on Thursday, welcome news for Prime Minister Theresa May ahead of a national election in just over a month’s time.

Metals Extend Sell-Off on Mounting Concerns Over Demand in China (Bloomberg) Metals extended their biggest daily plunge this year, buffeted by signs of ample supplies of copper, and concerns over demand in China. Iron ore tumbled in Dalian, steel plummeted in Shanghai and mining shares slid to the lowest level in four months.

Canadian Natural profit comes in below estimates (TheGlobeAndMail) Canadian Natural Resources is reporting $245-million of net income for the first quarter, a big improvement from the loss it experienced at the same time last year but less than analysts expected. The profit amounted to 22 cents per share for the Calgary-based oil and gas company.

Overnight markets 

Overview: US 10yr note futures are down -0.311% at 125-05, S&P 500 futures are up 0.17% at 2387.25, Crude oil futures are down -1.55% at $47.08, Gold futures are down -1.5% at $1229.8, DXY is down -0.07% at 99.141, CAD/USD is down -0.11% at 0.7291.

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 lower, US 10Y ~1bp higher 2.29% after 4bp rally yest, little reaction to slight beat on ADP +177 vs 175K exp with a small revision to March, FOMC decision later this afternoon, mkt will look for more info on balance sheet and inflation outlook.  Stock futures lower, S&P -3.5 and European stocks slightly lower on poor earnings from Apple. Treasury Q1 refunding statement mentions the Fed could increase bill & coupon sizes should the Fed end reinvestment, studying the issuance of ultra long bonds. Core Euro bonds. GOCs unch after tsy ann., Ontario issuing GBP 400mln FRNS @ 3ml + 9. Provis were well bid to start yest yet ended up getting hit on screens with the huge 5-6bp rally in GOCs yest afternoon.

News headlines 

Stocks Sag on Apple Miss; Dollar Climbs Before Fed: Markets Wrap (Bloomberg) U.S. stock futures pointed to a downbeat opening after European shares fell from a 20-month high as investors digested poor overnight news on Apple Inc. earnings. The dollar strengthened before a Federal Reserve meeting where policy makers will need to mull over another soft patch in the U.S. economy.

China urges all sides in North Korea standoff to ‘stop irritating’ one another (Reuters)     China on Wednesday called on all parties in the Korean standoff to stay calm and « stop irritating each other » a day after North Korea said the United States was pushing the region to the brink of nuclear war. The United States has urged China, reclusive North Korea’s lone major ally, to do more to rein in its neighbor’s nuclear and missile programs which have prompted an assertive response from the Trump administration, warning that the « era of strategic patience » is over.

Exchanges Still Dreaming of Deals After LSE-Deutsche Boerse Dies (Bloomberg) The world’s biggest exchanges are still looking for deals even though the merger of Deutsche Boerse AG and London Stock Exchange Group Plc was scuttled by European regulators.

Euro-Area Recovery Keeps Pace as ECB Stimulus Decision Nears (Bloomberg) The euro area maintained its growth momentum at the start of 2017, strengthening the case of those pressuring the European Central Bank to sketch out an end to extraordinary stimulus measures. Gross domestic product rose 0.5 percent in the first three months of the year, according to an initial estimate published by the European Union’s statistics office on Wednesday. That’s in line with the median estimate in a Bloomberg survey of economists and matches the pace of the previous quarter.

Toronto Home Price Growth Slows in April as New Listings Soar (Bloomberg) Toronto home price gains slowed in April and new listings soared the most in seven years, signaling the red-hot market may be cooling after the Ontario government imposed new measures to curb runaway gains in Canada’s biggest city. Housing prices jumped 25 percent last month from a year earlier, down from the 33 percent annual increase in March. The average price of C$920,791 ($671,000) in April was just 0.5 percent higher than in March, according to figures from the Toronto Real Estate Board.

Loblaw profit beats estimates on lower expenses (TheGlobeAndMail) Canadian grocery and pharmacy retailer Loblaw Cos Ltd reported a higher-than-expected quarterly profit as the company kept a tight lid on expenses and attracted more customers to its stores with discounts. Loblaw, which sells everything from grocery to wireless mobile products, has been streamlining operations to counter intense competition from U.S. discount stores and ecommerce companies.

Overnight markets 

Overview: US 10yr note futures are down -0.05% at 125-21, S&P 500 futures are down -0.14% at 2382.5, Crude oil futures are up 0.55% at $47.92, Gold futures are down -0.26% at $1253.7, DXY is up 0.1% at 99.078, CAD/USD is up 0.14% at 0.7284.

US Economic Data

Canadian Economic Data

There is no major economic news release.

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 lower, yields 1.5bps higher led by the 10Y at 2.332% (1.6bps), volumes in TY fuutres closer to avg (236k) as Europe/Asia back from vac.  Equities lower( emini -1.25), crude higher (49.30 + 0.30), USD up vs Yen for 4th day. Latest JPM Client Survey showed all clients at highest ner short since Feb 21st while active clients are net long for 3rd week. EGBs lower, gilts lower steeper after beter than exp Markit PMI. GOCs slightly lower, curve unch after big steepening move yest driven by US on Mnuchin ultra long bond comments – GOC 2s10s +4bps with 10s30s unch. Provis unch after closing 1bp tighter yest led by longs. In corps Pepsico Inc issued C$ 750mln 7Y @ 87 which ended up being well oversubscribed , and the bonds broke 3-4bps tighter. We are still buyers of HCG 18s – 88bid for up to 500k.

News headlines 

Global Stocks Climb Amid Earnings as Yen Weakens: Markets Wrap (Bloomberg) Global stocks headed for a fresh high as many markets reopened with investors focusing on stronger corporate earnings. The yen extended losses while Treasuries maintained declines. The MSCI All-Country World Index was poised for a record close, while European shares advanced. U.S. stock futures pointed to a lower opening. European government bonds fell across the board. Treasury yields climbed after Steven Mnuchin said it “could absolutely make sense” for the U.S. to sell ultra-long bonds.

Trump Weighs Breaking Up Wall Street Banks, Raising Gas Tax (Bloomberg) President Donald Trump said he’s actively considering a breakup of giant Wall Street banks, giving a push to efforts to revive a Depression-era law separating consumer and investment banking.

China’s factory output slows to 7-month low (Market Watch) China’s nationwide factory activity expanded at a slower pace in April, with a private gauge falling to a seven-month low. The Caixin China manufacturing purchasing managers’ index dropped to 50.3 in April from 51.2 in March, indicating a slower expansion of activity, Caixin Media Co. and research firm Markit said Tuesday.

China banks hike lending rates for Beijing home buyers: sources (Reuters) The Beijing branches of at least six major Chinese banks have raised interest rates on housing loans for first- and second-home buyers, effective from May 1, six sources with direct knowledge of the hikes told Reuters.

U.K. Manufacturing Growth Surges to Fastest in Three Years (Bloomberg) U.K. manufacturing unexpectedly grew at the fastest pace in three years in April as the domestic market strengthened and the pound’s depreciation boosted exports. A measure of factory conditions rose to 57.3 from 54.2 in March, according to IHS Markit’s Purchasing Managers’ Index. That’s far better than the 54 forecast by economists in a Bloomberg survey and above the 50 level dividing expansion from contraction. Growth in new orders and exports also gathered pace.

Greek Debt-Relief Talks Move Closer After Late-Night Deal (Bloomberg) Greece resolved the latest impasse over the terms of its bailout program with international creditors in the early hours of Tuesday, unlocking the way for debt-relief talks and the disbursement of the next tranche of emergency loans.

Will Home Capital Dent Canada’s ‘Boring-but-Stable’ Reputation? (Bloomberg) As Home Capital Group Inc. spiraled downward last week, a group of Canadian real estate brokers relaxing in Mexico brooded over whether the mortgage lender’s woes would seep into the housing market and trigger the kind of crisis the country averted in 2008.

Overnight markets 

Overview: US 10yr note futures are down -0.075% at 125-12, S&P 500 futures are down -0.01% at 2386.75, Crude oil futures are up 0.37% at $49.02, Gold futures are down -0.14% at $1253.7, DXY is up 0.01% at 99.083, CAD/USD is up 0.15% at 0.7298.

US Economic Data

Canadian Economic Data

There is no major economic news release.

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