Commentaires

Market Update

Tsys opening unch, curve slightly flatter, 2Y +0.5bps 1.29%, 10Y unch 2.382, light volume in TY futures. S&P futures up 0.1%,crude extending gains +1.2% @52.88 on Libyan oil field outage and Russia signalling an extension of OPEC production cuts.  Euro near one month low, German bunds higher & steeper, 10Y 0.223%. Bund-OAT spd 3.6bps wider at 70bps.  Weakness in France & periphery on polls showing rise of left wing candidate Melenchon.  The US auctions $24bln in 3Y notes this aft followed by $20bln in 10Y notes tomorrow and $12bln 30Y bonds Wednesday as Thursday is half day before full day close Friday. In Canada, GOCs are unch. Friday saw GOCs lag the pullback in tsys as US 10s went from 2.27% pre non farms to 2.38% with GOCs actually narrowe in the short end despite strong Cdn employment. BOC decision & MPRthis Wednesday –   Poloz likely to remain cautious and focus on ongoing risks including non energy exports, household debt.. Provis opening unch after finishing Friday 1-1.5bps tighter, long Ontario deal rumoured.

News headlines 

Dollar Enjoys Support From Dudley Comments Before Yellen Q&A (Bloomberg) A post-U.S. payrolls rebound in the dollar and Treasury yields kept driving thin markets on Monday before a speech by Federal Reserve Chair Janet Yellen that follows hawkish comments from Fed Vice-Chairman William Dudley. Yellen will speak at the University of Michigan Ford School of Public Policy and will take questions from the audience and Twitter. Investors will look for further forward guidance after Dudley downplayed the length of any pause in short-term rate normalization after the Fed starts shrinking its balance sheet. The Bloomberg Dollar Spot Index rose a third day, up as much as 0.2 percent amid modest flows, according to foreign-exchange traders across Europe.

A Foreign Threat to U.S. Treasuries That Dwarfs Fed’s Debt Hoard (Bloomberg) These days, it seems like everyone in the bond market is obsessed over what will happen when the Federal Reserve starts whittling down its mammoth, crisis-era investments in U.S. government bonds. Yet lost in the hullabaloo is one little-noticed fact: there’s an even bigger debt pile that could draw buyers away from Treasuries at just the wrong time.

French Election Becomes a Four-Way Race as Melenchon Surges (Bloomberg) France’s presidential election is becoming a four-way contest as far-left candidate Jean-Luc Melenchon surges to catch Republican Francois Fillon, stoking uncertainty over the outcome less than two weeks before voting begins.

Bank of England Pressed Banks to Lower Libor Rates, BBC Says (Bloomberg) The Bank of England repeatedly pressured commercial banks to lower their settings for the benchmark London interbank offered rate during the 2008 financial crisis, according to the BBC. The report cited a secret recording in which a senior manager at a large U.K. bank instructed a Libor submitter to lower his rates.

Oil rises after U.S. missile strike in Syria, ends week 3 per cent up (TheGlobeandMail) Oil prices rose on Friday, trading near a one-month high and closing the week up 3 per cent after the United States fired missiles at a Syrian government air base, raising concern that the conflict could spread in the oil-rich region.

Barclays C.E.O. Investigated Over Treatment of Whistle-Blower (NYTimes) The British authorities are investigating Barclays and its chief executive, James E. Staley, after he admitted to trying to learn the identity of a whistle-blower last year, the bank said on Monday. The investigation adds to the public relations troubles of the bank, whose reputation has been hit hard in Britain in recent years by revelations of employee misconduct dating from the financial crisis and earlier.

Mondelez Lays Groundwork to Replace Its Chief Executive, Irene Rosenfeld (Fortune) Mondelez International is preparing to look for a successor to Chief Executive Officer Irene Rosenfeld as the snack maker faces shareholder pressure and a broad shift to healthier eating hab its , the Wall Street Journal reported, citing sources.

Taper Tranquility Not Tantrum Greets Fed Bond-Reduction Plan (Bloomberg) News about the U.S. central bank’s strategy to start reducing its bond holdings, which began taking shape over the past week, has actually led to easier financial conditions via lower interest rates. That contrasts with the surge in Treasury yields that occurred during the so-called “taper tantrum” of 2013, when then-Fed Chairman Ben Bernanke hinted the central bank would reduce its purchases of Treasuries and mortgage-backed securities that were designed to bring down long-term interest rates.

Overnight markets 

Overview: US 10yr note futures are down -0.038% at 124-25, S&P 500 futures are up 0.06% at 2353.75, Crude oil futures are up 1.11% at $52.82, Gold futures are down -0.6% at $1249.8, DXY is up 0.05% at 101.23, CAD/USD is down -0.27% at 0.748.

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 moving lower after Mar Payroll downside surprise 98k vs exp 180k and AHE 2.7% y/y as exp and after a risk off session overnite in reaction to US Syria attack, US 10Y 2.303 vs 2.27% post payrolls. Core Euro bonds higher, bund & gilt yields 3-4bps lower., gilts getting an additional boost from much weaker than exp Feb Ind Prod (-0.7% vs 0.2%). GOCs lagging after employment rose 19.4k last month vs 5.7k exp led by 18.4k increase in full time. Provis unch , still fairly decent bid considering 10Y all in yields are lowest since Nov with rumours of Ont/QC deal in the works (long?). Quebec well bid, QC/Ont 48 0.8/0.6  vs 1.2bps last Fri – positive article in BB after budget supportive. Newfoundland budget very constructive for spreads –  deficit for FY 16/17 expected to be ~1.08bln vs 1.83bln proj last year or a $750mm reduction, while bond issuance will drop by 86%!  to $400mln from 2.9bln. The NF/Ont 48 roll 39/38 vs 48/46 last week – stil some decent relative value in NF credit despit ethe narrowing, spreads have barely retraced ~30% of their 2014 widening vs Ont.

News headlines 

Syria Strike Jolts Financial Assets; Ruble Drops: Markets Wrap (Bloomberg) The U.S. missile attack on Syria jolted financial markets, boosting haven assets and temporarily wresting investor focus from jobs data that may shed light on the strength of the world’s largest economy. Gold, oil and government bonds were among the biggest gainers following the first military strike undertaken by President Donald Trump’s administration, as some traders sought safety and others judged increasing tension in the Middle East would spur crude. Russia’s ruble dropped the most in almost a month and its bonds fell as optimism over a detente with the U.S. evaporated. The lira and stocks retreated in Turkey, which shares a border with Syria.

Oil hits one-month high after U.S. missile strike in Syria (Reuters) Oil prices hit a one-month high on Friday after the United States fired missiles at a Syrian government airbase, sending shockwaves through global markets and raising concerns that the conflict could spread in the oil-rich region. The toughest U.S. action yet in Syria’s six-year-old civil war has ramped up geopolitical uncertainty in the Middle East. Oil, gold, foreign exchange, German and U.S. 10-year bonds reacted strongly to the attack.

Payroll Gains Slow While U.S. Jobless Rate at Lowest Since 2007 (Bloomberg) U.S. payroll gains slowed in March while the jobless rate unexpectedly dropped to the lowest in almost a decade, suggesting the labor market is returning to a more sustainable pace of progress. The 98,000 increase followed a 219,000 rise in February that was less than previously estimated, a Labor Department report showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 180,000 advance. The unemployment rate fell to 4.5 percent from 4.7 percent, and wage gains slowed to a 2.7 percent year-over-year pace.

Top Loonie Forecasters See Weakness Ahead on More Fed Rate Hikes (Bloomberg) The Canadian dollar will weaken in the coming months, as the Federal Reserve is expected to continue increasing rates while the Bank of Canada is bound to stay put, according to the currency’s highest-ranked forecasters. The loonie started strong in 2017, recovering from a 10-month low at the end of 2016 by taking advantage of January’s broad-based decline in the U.S. dollar. But it has faltered in recent weeks, reducing this year’s gain to 0.2 percent, making it the worst performer among Group of 10 currencies.

Bank of England’s Carney calls for UK-EU bank rules pact after Brexit (Reuters) Bank of England Governor Mark Carney called on Friday for Britain and the European Union to reach a sweeping deal to recognize each others’ bank rules after Brexit or risk a potentially damaging hit to financial services across Europe. Carney said in a speech at Thomson Reuters’ London office that banks had to be ready for a « hard » Brexit and he set a July 14 deadline for cross-border finance firms operating in Britain to tell the BoE how they would cope with an abrupt EU exit.

Greece Rescue Payout Moves Closer With Deal to Accelerate Talks (Bloomberg) Greece and its international creditors struck an agreement at a meeting of euro-area finance ministers in Malta on Friday, breaking the latest deadlock over the country’s rescue and paving the way for about 7 billion euros ($7.5 billion) in aid for Athens.

China’s Xi urges trade cooperation in first meeting with Trump (Reuters) Chinese President Xi Jinping urged cooperation with the United States on trade and investment on Thursday, inviting President Donald Trump to visit China in a cordial start to their first meeting likely to broach sensitive security and commercial issues.

Overnight markets 

Overview: US 10yr note futures are up 0.212% at 125-13, S&P 500 futures are down -0.16% at 2350, Crude oil futures are up 0.29% at $51.85, Gold futures are up 1.29% at $1269.5, DXY is up 0.13% at 100.8, CAD/USD is down -0.33% at 0.748.

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 off post ADP  losses – AD P surprised to the upside (263k vs 185k)pointing to a strong non farm,  10Y  2.37% (+1bp), equity futures higher while crude extending gains  51.58(+1.0%) after API crude inventories fell 1.83mln bbls last week. EGBs lower  10Y bund 0.267%  with French yields unch – France’s Le Pen said to have underperformed once again in a TV debate while ECB council member Weidmann advocated removing policy accommodation. GOCs outperforming as tsys rebound, 10Y 1.59%, provis unch after finsihing wider on no supply. Quebec priced its 10Y USD benchmark at MS+ 52.

News headlines 

Stocks Rise as Oil Extends Gain; Data Boosts Pound: Markets Wrap (Bloomberg) European stocks overcame a sluggish start as oil’s advance spurred energy companies, while the dollar and Treasuries steadied before the latest Fed minutes and a meeting between Donald Trump and China’s Xi Jinping. Sterling rose as U.K services grew faster than expected.

EU, Greece urge deal on bailout review on Friday (Reuters) Greece and its lenders must reach a deal on a long-stalled bailout review at a meeting of euro zone finance ministers on Friday, the country’s Prime Minister Alexis Tsipras said on Wednesday, blaming creditors for unwarranted delays.

Trump declares end to ‘war on coal,’ but utilities aren’t listening (Reuters) When President Donald Trump signed an executive order last week to sweep away Obama-era climate change regulations, he said it would end America’s « war on coal », usher in a new era of energy production and put miners back to work.

EU lawmakers adopt Brexit resolution, reject pro-Gibraltar hint (Reuters) European Union lawmakers adopted a resolution on Wednesday setting their red lines for the two-year divorce talks with Britain and rejected attempts by British MEPs to recognize Gibraltar’s pro-EU stance in the Brexit referendum.

Le Pen Ambushed in French Debate as Macron Attacks on Euro (Bloomberg) Marine Le Pen was labeled soft on her euro exit plans during a television debate performance that failed to win over viewers. The National Front leader’s opposition to the European Union has been a signature issue in the presidential election.

Hudson’s Bay Co posts deep $152 million net loss as it continues to make ‘tough decisions’ (Financial Post) Hudson’s Bay Co. posted a steep fourth quarter loss Tuesday after the retailer reported weak holiday sales and took a $116 million impairment charge related to its ailing off-price business, which includes Saks Off Fifth and online deals retailer Gilt.

Toronto Home Prices Just Jumped Another 33% (Bloomberg) Toronto’s residential housing market showed no signs of cooling last month, with the average sale price soaring a record 33 percent from a year ago, pushing the cost of a detached home in the heart of the city to almost C$1.6 million ($1.2 million).

Overnight markets 

Overview: US 10yr note futures are down -0.112% at 124-29, S&P 500 futures are up 0.18% at 2360.75, Crude oil futures are up 1.23% at $51.66, Gold futures are down -0.59% at $1251, DXY is up 0.01% at 100.55, CAD/USD is down -0.11% at 0.747.

US Economic Data

Canadian Economic Data

There is no major economic news 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