Commentaires

Market Update

Tsys moving lower on higher core PCE which rose to the Fed’s target 1.8% from 1.7% for the first time since 2012, US 10Y 2.42%. Core Euro bonds mixed –  UK gilt curve 1bp flatter as UK gilts have 0.29yr month end extension based on BB data, compared to 0.07yrs for tsys. German bunds recovering from earlier losses , German unemployment fell to a new all time low of 5.7% in March as the no. of unemployed fell by 30k vs 10k exp. Euro zone inflation fell to 1.5% in Jan from 1.8%, 0.7% for the core . ECB Coeure said the balance of risks has shifted to neutral and that inflation remains subdued. GOCs lower, underperforming tsys after Cdn Jan GDP surprised to the upside in Jan, rising 0.6% vs 0.3% exp 2.3% y/y vs 1.9%- quite strong thou ‘whisper’ no. was already higher given the run of solid Jan data.

News headlines 

Global Stocks Drop on Final Day of Stellar Quarter: Markets Wrap (Bloomberg) Global stocks were poised to end a blockbuster quarter with a whimper, with investors seeing little reason to take shares higher amid political and economic uncertainty in the coming quarter. The rand tumbled after South Africa’s finance minister was fired.

Euro-Area Inflation Slows More Than Predicted on Oil, Food (Bloomberg) Inflation in the euro area slowed for the first time in nearly a year this month, which may reinforce the view among some European Central Bank policy makers that it’s too soon to start unwinding unconventional stimulus.

Japan output jump, low jobless rate yet to spark inflation (Reuters) Japanese factory output rose at the fastest pace in eight months and the jobless rate hit a two-decade low in February, a sign a rebound in overseas demand continued to brighten prospects for the country’s export-reliant economy. But household spending remained soft and consumer inflation was flat when stripping away the effect of rising energy costs, underscoring the challenges the Bank of Japan faces in generating sustained price rises backed by steady wage growth.

China’s factory activity hits 5-year high in March (Market Watch) An official gauge of Chinese factory activity hit a near five-year high in March as government stimulus spending and rising prices for factory goods bolstered the world’s second-largest economy. China’s official manufacturing purchasing managers’ index edged up to 51.8 in March from 51.6 in February, the National Bureau of Statistics said Friday. The March reading, slightly above a median forecast of 51.7 from a Wall Street Journal poll of by 12 economists, has remained above the 50 mark separating expansion from contraction for eight straight months.

EU offers Brexit trade talks, sets tough transition terms (Reuters) The European Union offered Britain talks this year on a future free trade pact but made clear in negotiating guidelines issued on Friday that London must first agree to EU demands on the terms of Brexit. Those include paying tens of billions of euros and giving residence rights to some 3 million EU citizens in Britain, the proposed negotiating objectives distributed by EU summit chair Donald Tusk to Britain’s 27 EU partners showed.

Credit Suisse Raided, Client Assets Seized in Tax Evasion Probe (Bloomberg) Credit Suisse Group AG, some of its employees and hundreds account holders are the subjects of a major tax evasion and money laundering probe that spans five countries. Investigators in the Netherlands arrested two individuals on Thursday, seizing a gold bar, paintings, jewelry and bank account information. They allegedly concealed millions of euros from authorities by placing them in Swiss bank accounts, the Fiscal Information and Investigation Service said in a statement Friday. Criminal investigations are also underway in Australia, Germany, the U.K. and France.

BCE, Rogers racing to new frontier in high-speed Internet (TheGlobeAndMail)  In their continuing fight for the home, BCE Inc. and Rogers Communications Inc. are racing to roll out faster networks while they capitalize on different strengths to win television and Internet customers. In separate announcements this week, the rivals underscored investments they’re making to support download speeds of one gigabit per second – the new frontier in high-speed Internet, crucial for the growing number of connected devices, data-hungry applications and advanced television platforms.

Overnight markets 

Overview: US 10yr note futures are down -0.038% at 124-10, S&P 500 futures are down -0.14% at 2361.25, Crude oil futures are down -0.2% at $50.25, Gold futures are down -0.42% at $1242.7, DXY is up 0.06% at 100.47, CAD/USD is down -0.31% at 0.7518.

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 Q4 GDP revised higher, core PCE higher 1.3% vs 1.2%, after narrow range overnite on muted volume in TY1 futures (235k), US 10Y 2.39% (+2bps). Core Euro bonds higher, the 10Y bund yield lower for a fifth day @ 0.323% three week low on divergent monetary policy after yest Reuters story saying ECB is reluctant to change its policy message while Fed Rosengren & Williams yest seemed to leave the door open for more than three rate hikes this year if warranted. German March CPI also supportive – 0.2% vs 0.4% with the  y/y slowing to 1.5% from 2.2% in Feb vindicating cautious ECB outlook for removing accommodation. GOCs lower after 8:30 data , provis unch – Alberta longs yest @ 99 sold out quick as crude rallied, 98/97 bid this morn (Ont + 11).

News headlines 

U.S. stock futures slightly lower ahead of Fed speakers, GDP data (Reuters) U.S. stock index futures were slightly lower on Thursday as investors awaited key economic data, including a final reading on fourth-quarter GDP numbers, and speeches by a host of Federal Reserve officials.

First German inflation data presses euro lower (Reuters) A swing in sentiment against the euro dominated major currency markets for a second day on Thursday, weak initial readings of German regional inflation prodding the single currency back to nine-day lows against the dollar.

Oil steady on Libya disruptions, bloated U.S. stockpiles (Reuters) Oil prices slipped on Thursday after two days of increases as bloated U.S. inventories limited the impact of supply disruptions in Libya and lower output from other OPEC exporters. Brent crude oil LCOc1 was down 30 cents at $52.12 a barrel by 0945 GMT (5:45 a.m. ET). U.S. crude oil CLc1 was 10 cents lower at $49.41.

Cenovus to Double Size With $13.3 Billion Buy of Conoco Assets (Bloomberg) Cenovus Energy Inc. will double its reserves and production by buying Canadian holdings from ConocoPhillips for C$17.7 billion ($13.3 billion), the latest sale of energy assets in that country by international companies stung by falling oil prices.

Brexit Trigger Spells Trouble for U.K.’s Sweet Economic Run (Bloomberg) The U.K. economy’s sweet spot is about to be challenged. Prime Minister Theresa May kickstarted the formal withdrawal from the European Union on Wednesday, leaving businesses and investors facing the realities of Brexit and changes to everything from regulation to the movement of workers and goods.

Dollarama profit beats estimates as customers spend more (TheGlobeAndMail) Canadian discount retailer Dollarama Inc. reported a higher-than-expected quarterly profit on Thursday as customers spent more in its stores. The Montreal-based company said the rise in sales was aided by a 7.8 per cent increase in the average checkout bill. Dollarama also said it opened 26 new stores in the fourth quarter.

Overnight markets 

Overview: US 10yr note futures are down -0.013% at 124-18, S&P 500 futures are down -0.05% at 2355.75, Crude oil futures are up 0.83% at $49.92, Gold futures are down -0.58% at $1249.5, DXY is up 0.2% at 100.2, CAD/USD is down -0.11% at 0.7512.

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

US tsys higher, moving higher with core Euro bonds on Brexit news and Reuters story that the ECB is wary of making a policy change before June. Tsys underperforming EGBs in the rally, US 10Y below 2.40 (2.396 -2bps),  10Y bund ~5bps lower @ 0.337%, 10Y tsy/bund spd widening to 2 week high 205bps. Gilt were actually lower early on yet surged into NY open as mkt turned attention to PM May Article 50 trigger. The US auctions $13bln 2Y FRNs at 11:30 & $28bln in 7Y notes at 1:00, with Fed speakers Evans, Rosengren and Williams. GOCs higher led by 10Y with longs lagging once again, 10s30s at 1mnth highs 69.5, 2Y auction today – $3.9bln reopened Feb 19s with the 2Y roll 2.6/2.1. Provis unch after widening 0.5bps yest despite firmer credit, Ont 27s 77/76, long Alberta 46 still expected. City of Toronto issued $300mln in June 46s at 119 or Onts +31 . National Bank new 5.25Y (June 22) dep note yest – $750mm @ 83.2 which broke 3bps tighter. Quebec budget – no impact on spds, balance budget (3rd in a row) and borrowing to be cut in half for FY 2017/18.

News headlines 

Pound Choppy on Brexit Day; European Stocks Drift: Markets Wrap (Bloomberg) European stocks and U.S. share futures struggled for direction as a bounce on optimism over the American economy faded and President Donald Trump battled to revive his legislative agenda. The pound reversed losses as the U.K. started its exit from the EU.

Dollar climbs on Fed talk, sterling pressured by Brexit launch (Reuters) The dollar pulled away from 4-1/2-month lows on Wednesday after solid data backed expectations for more U.S. interest rate hikes this year, while sterling dipped as Britain moved to launch its exit from the European Union.

Oil Gains as Libyan Crude Drop Offsets What OPEC Curbs Couldn’t (Bloomberg) Oil rose after a pipeline halt reduced output in OPEC member Libya, countering concerns that a U.S. surplus shows little sign of diminishing. Libya’s output was said to fall to about 500,000 barrels a day after a pipeline carrying crude from the Sharara field — its biggest — stopped operating.

Huge range of sterling forecasts clouds horizon for Brexit talks (Reuters) While banks warn Britain’s European Union divorce could drive the pound below $1.20, their option traders have cut the cost of insuring against further falls in the two years it has left inside the bloc.

Quebec Cuts Personal, Business Taxes After Balancing Budget (Bloomberg) Quebec will balance its budget for the third straight year, giving Finance Minister Carlos Leitao more room to lower taxes for workers and businesses while increasing spending on transit and health care.

EU vetos Deutsche Boerse-London Stock Exchange merger deal (Reuters) An attempted merger between the German and British stock exchanges was struck down by European regulators on Wednesday, formally ending a deal that unraveled in the wake of Britain’s vote to leave the European Union.

Overnight markets 

Overview: US 10yr note futures are up 0.113% at 124-16, S&P 500 futures are up 0.05% at 2352.75, Crude oil futures are up 0.43% at $48.58, Gold futures are down -0.28% at $1255.3, DXY is up 0.33% at 100.04, CAD/USD is down -0.07% at 0.7477.

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