Commentaires matinaux

Market Update

Tsys trading mixed, curve slightly steeper, US 10Y 2.01% on light volume (265k TY1) as focus turns to G20 in Osaka this weekend and US/China trade negotiations. May Personal Income & spending as well as U. of Michigan sentiment scheduled for this morning. Core EGBs flat, Italian spreads ~3bps narrower as Italy PM will ask the EU to delay deficit procedure to Sept or Oct.  In Canada, GOCs also flat before Apr GDP and BOC Business Outlook Survey – we expect a mild decline from the -0.6% Q1 reading due mainly to lower capacity utilization (lowest since 2017) and ongoing trade concerns with the US. 

News headlines

U.S. Futures, European Stocks Rise as G-20 Starts: Markets Wrap (Bloomberg) American equity futures climbed alongside European stocks on Friday ahead of the highly anticipated U.S.-China presidential meeting that could determine the next chapter in the trade war. Asian shares edged lower, while bonds drifted.

TSX futures rise ahead of GDP data (Reuters) Canada’s main stock index futures edged higher on Friday, ahead of gross domestic product data, gaining support from higher gold prices.

Trump prepares for ‘productive’ talks with Xi on trade war (Reuters) U.S. President Donald Trump on Friday said he hoped for productive talks with Chinese President Xi Jinping on a trade war that is casting a shadow on global growth, but said he had not made any promises about a reprieve from escalating tariffs.

European shares move higher ahead of pivotal G20 meeting (Reuters) European stocks edged higher on Friday, as investors treaded cautiously ahead of a critical G20 meeting where the outcome of U.S-China trade talks will be closely monitored against the backdrop of a slowing global economy.

G20 meeting may offer more clarity for OPEC, non-OPEC: Russia’s Novak (Reuters) Russian Energy Minister Alexander Novak said on Friday he hoped a meeting of G20 nations in Japan would provide clarity for OPEC and non-OPEC oil producers as they consider whether to extend a deal on cutting crude supplies beyond June.

Oil Set for Best Month Since January Before Crucial Meetings (Bloomberg) The U.S.-Iran standoff and falling American stockpiles have propelled oil toward its biggest monthly gain since January but crucial meetings in the next few days will determine whether the rally continues.

Canada has ‘broad international’ support on China file: Freeland (BNN) Canada is fortunate to have assembled a « broad international coalition » of countries who support Canada and believe arbitrary detentions are harmful, Foreign Affairs Minister Chrystia Freeland said Friday at the G20 summit in Osaka.

Euro set for biggest monthly gain in 17 months before price data (Reuters) The euro stabilised on Friday but was on track for its biggest monthly gain in 17 months as traders questioned how much firepower the European Central Bank could potentially roll out to support a struggling economy and boost inflation.

Market Overview: US 10yr note futures are down -0.098% at 127-26, S&P 500 futures are up 0.18% at 2936.25, Crude oil futures are up 0.17% at $59.53, Gold futures are up 0.33% at $1416.6, DXY is down -0.05% at 96.15, CAD/USD is down -0.01% at 0.7637.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.46%	2 Year	1.747%
5 Year	1.389%	5 Year	1.775%
10 Year	1.48%	10 Year	2.017%
30 Year	1.716%	30 Year	2.535%

US Economic Data

08:30 AM	Personal Income, May  Survey: 0.30%  Prior: 0.50%
	Personal Spending, May  Survey: 0.50%  Prior: 0.30%
	Real Personal Spending, May  Survey: 0.40%  Prior: 0.00%
	PCE Deflator YoY, May  Survey: 1.50%  Prior: 1.50%
	PCE Core Deflator MoM, May  Survey: 0.20%  Prior: 0.20%
	PCE Core Deflator YoY, May  Survey: 1.50%  Prior: 1.60%
09:45 AM	MNI Chicago PMI, Jun  Survey: 53.5  Prior: 54.2
10:00 AM	U. of Mich. Sentiment, Jun F  Survey: 97.9  Prior: 97.9

Canadian Economic Data

08:30 AM	GDP MoM, Apr  Survey: 0.20%  Prior: 0.50%
	GDP YoY, Apr  Survey: 1.60%  Prior: 1.40%
	Industrial Product Price MoM, May  Survey: -0.10%  Prior: 0.80%
	Raw Materials Price Index MoM, May  Survey: -3.00%  Prior: 5.60%
10:30 AM	BoC Business Outlook Future Sales, 2Q  Survey: —  Prior: 6.0
	BoC Senior Loan Officer Survey, 2Q  Survey: —  Prior: -2.7

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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

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

Market Update

US tsys rebounding from earlier losses in Asia, tsy yields 0.5-1bp lower led by the long end with the 10Y 2.04% . Stock futures saw a sharp pullback in early NA trading after WSJ story linking trade agreement to lifting of US ban on Huawei, also news Ford will cut 20% of its European workforce S&P futures +4.5. Key events in the US include updated Q1 GDP (3.2% vs 3.1% prev) and $32bln 7Y note auction. GOCs higher, narrower vs tsys out to 10s, 10Y 1.49%. Focus on tomorrow’s  April GDP and Business Outlook Survey. Yesterday Telus priced $800mln in 7Ys @ 133.2, which closed 127/, proceeds used to paydown its 2020 issue. Back in March Telus issued 10s @ 175 which are currently 158/153, so 133 looked to be a 7-10bp concession.

News headlines

U.S. Futures Pare Gain on Trade Doubts Before G-20: Markets Wrap (Bloomberg) U.S. equity futures pared a gain on Thursday and European stocks turned lower amid edgy trading in the build-up to a potentially pivotal G-20 meeting in Japan. Treasuries reversed a small drop and gold pared a decline.

TSX futures rise on global cues (Reuters) Stock futures for Canada’s main equity index rose on Thursday, as the risk appetite returned to global markets following a media report that the U.S. and China have tentatively agreed to a truce ahead of a highly-anticipated weekend meeting of the two nations’ leaders in Tokyo.

China urges U.S. to lift sanctions on Huawei as Trump-Xi meeting looms (Reuters) The United States should immediately remove sanctions on Chinese telecoms equipment maker Huawei, a commerce ministry spokesman said on Thursday, days before the two countries’ leaders are due to meet for talks on trade.

EU to call for help from G20 leaders in reforming WTO (Reuters) European Union leaders will this week urge the G20 to help reform the World Trade Organization in order to preserve a rules-based system which is under threat from an escalating trade war between China and the United States.

Oil Retreats From Five-Week High as Trump Damps Trade Optimism (Bloomberg) Oil retreated from a five-week high in New York after U.S. President Donald Trump warned he might impose substantial additional tariffs on Chinese imports.

Bitcoin slides 12%, ending recent surge (Reuters) Bitcoin’s price skidded 12% lower on Thursday to around $11,383 after hitting an 18-month high of nearly $14,000 earlier this week.

Corporations take it on the chin in first Democratic debate (Reuters) To the Democrats running for president of the United States, corporations charge too much for medicines and other critical goods, do not pay enough in taxes and repay bailouts by taking jobs overseas.

Market Overview: US 10yr note futures are up 0.061% at 127-22, S&P 500 futures are up 0.21% at 2924.25, Crude oil futures are down -0.89% at $58.85, Gold futures are down -0.47% at $1408.7, DXY is down -0.04% at 96.18, CAD/USD is up 0.03% at 0.7616.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.447%	2 Year	1.765%
5 Year	1.386%	5 Year	1.791%
10 Year	1.488%	10 Year	2.036%
30 Year	1.727%	30 Year	2.557%

US Economic Data

08:30 AM	GDP Annualized QoQ, 1Q T  Survey: 3.20%  Prior: 3.10%
	Personal Consumption, 1Q T  Survey: 1.30%  Prior: 1.30%
	GDP Price Index, 1Q T  Survey: 0.80%  Prior: 0.80%
	Core PCE QoQ, 1Q T  Survey: 1.00%  Prior: 1.00%
	Initial Jobless Claims, Jun 22  Survey: 220k  Prior: 216k
	Continuing Claims, Jun 15  Survey: 1665k  Prior: 1662k
09:45 AM	Bloomberg Consumer Comfort, Jun 23  Survey: —  Prior: 61.8
10:00 AM	Pending Home Sales MoM, May Survey: 1.0%  Prior: -1.5%

Canadian Economic Data

There is no Canadian economic data 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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

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

Market Update

US tsys lower, near overnight lows, risk on after comments from US tsy sec Mnuchin on possible trade deal with China, in advance of Trump/Xi meeting on Saturday at G20. S&P futures +12.5, crude +2% 58.94 highest since May 30^th. Tsy curve 1bp flatter, 10Y 2.02% (+3.4bps), on heavy volume (465k) in TY futures. Core Euro bonds also lower, lagging the move in tsys by ~2bps. GOCs lower, in line with tsys. Two year auction at noon – reopening of August 21s with the Aug21/2Y roll -2.1/-2.4.

News headlines

U.S. Futures Advance on Trade Hopes; Bonds Retreat: Markets Wrap (Bloomberg) U.S. index futures gained while stocks in Europe fluctuated as comments by Treasury Secretary Steven Mnuchin tempered concern over the trade impasse with China. Government bonds retreated.

TSX futures up on higher oil prices (Reuters) Canada’s main stock index futures rose on Wednesday as oil prices jumped after data showed a decline in U.S. crude inventories and an outage at a major refinery on the U.S. East Coast.

China asks Canada to suspend all meat exports amid tensions (BNN) The Chinese Embassy said Tuesday it has asked Canada to suspend all meat exports, a surprise move that comes amid the diplomatic dispute over the December arrest of Huawei executive Meng Wanzhou in Vancouver.

U.S. aims to restart China trade talks, will not accept conditions on tariff use (Reuters) The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday, but Washington will not accept any conditions around the U.S. use of tariffs in the dispute, a senior administration official said on Tuesday.

Trump-Xi meet, Iran tension to overshadow G20 summit in Japan (Reuters) Concerns over trade, conflict and oil will dominate a summit of the Group of 20 major economies in Japan this weekend, with attention focused on a meeting between the leaders of the United States and China, embroiled in a lengthy trade war.

Oil Jumps to Four-Week High on Report of Falling U.S. Stockpiles (Bloomberg) Oil rose to a four-week high after an industry report signaled a bigger-than-forecast drop in U.S. crude stockpiles, adding impetus to a rally that’s been driven by a tense standoff between Washington and Tehran.

BoE makes case for flexible regulation after Brexit (Reuters) Britain needs independent financial regulators after Brexit that can respond swiftly to changes in the economy and continue to nurture innovation, a senior Bank of England official said on Wednesday.

Market Overview: US 10yr note futures are down -0.22% at 127-27, S&P 500 futures are up 0.41% at 2934, Crude oil futures are up 1.83% at $58.89, Gold futures are down -0.7% at $1408.7, DXY is up 0.16% at 96.293, CAD/USD is down -0.09% at 0.76.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.432%	2 Year	1.745%
5 Year	1.367%	5 Year	1.764%
10 Year	1.474%	10 Year	2.018%
30 Year	1.713%	30 Year	2.542%

US Economic Data

07:00 AM	MBA Mortgage Applications, Jun 21  Survey: —  Actual: 1.30% Prior: -3.40%
08:30 AM	Durable Goods Orders, May P  Survey: -0.30%  Prior: -2.10%
	Durables Ex Transportation, May P  Survey: 0.10%  Prior: 0.00%
	Cap Goods Orders Nondef Ex Air, May P  Survey: 0.10%  Prior: -1.00%
	Cap Goods Ship Nondef Ex Air, May P  Survey: 0.10%  Prior: 0.00%
	Wholesale Inventories MoM, May P  Survey: 0.50%  Prior: 0.80%

Canadian Economic Data

There is no Canadian economic data 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, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

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

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

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