Commentaires matinaux

Market Update

US tsys lower, avg volume in TY futures (345k), 10Y 2.08 (+2bps), curve 1.5bps flatter 2s30s ahead of FOMC later today. Core Euro bonds lower, gilt/bund 10Y yields 3-4bps higher, retracing most of yesterday’s  Draghi inspired gains despite some weak data in Germany  (May PPI -0.1% vs 0.1% exp). Fed not expected to cut rates today, yet may alter the statement to reflect the latest downbeat readings on the economy and threats from a prolonged trade war with China. GOCs  lower , ~1bp wider vs the US in 10s before  May CPI (0.1% exp). Provi spreads well bid yest on ‘risk-on’, despite low yields and ongoing supply – $300mln long NBs @ 105 . In corps, TD issued $1.75bln 12NC7 NVCC @ 168, closing 2bps tighter.

News headlines

U.S. Stock Futures Drift as Bonds Slip Before Fed: Markets Wrap (Bloomberg) U.S. equity futures were in a holding pattern on Wednesday while Treasuries slipped as investors prepared for the latest Federal Reserve meeting to conclude, with anticipation growing that policy makers will signal a readiness to lower rates.

China says history shows positive outcome from U.S. talks possible (Reuters) China said on Wednesday positive outcomes were possible in trade negotiations with the United States, after the presidents of the world’s two largest economies agreed to revive their troubled talks at a G20 meeting this month.

Central banks’ dovish cooing keeps world stocks lulled near two-week highs (Reuters) World stocks held near two-week highs on Wednesday as investors bet on a worldwide wave of central bank stimulus, with expectations building that the United States and the euro zone may deliver interest rate cuts as early as July.

China snub, drought and debt shake finances of Canada’s farmers (Reuters) For years, the financial stability of Canadian farmers was the envy of their American counterparts, but rising costs, drought and a dispute with China have weakened their bottom lines.

U.S. Federal Reserve seen signaling cut by losing patience (BNN) Facing pressure from Wall Street and President Donald Trump, Federal Reserve Chairman Jerome Powell and his colleagues may be running out of patience.

Dollar near two-week high before Fed and after dovish ECB (Reuters) The dollar traded near two-week highs against the euro on Wednesday as investors waited to see whether the U.S. Federal Reserve would sound as dovish on future interest rate cuts and stimulus as the European Central Bank.

Market Overview: US 10yr note futures are down -0.184% at 127-09, S&P 500 futures are down 0% at 2926.25, Crude oil futures are down -0.07% at $53.86, Gold futures are down -0.38% at $1345.5, DXY is down -0.11% at 97.54, CAD/USD is down 0% at 0.7475.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.424%	2 Year	1.895%
5 Year	1.351%	5 Year	1.864%
10 Year	1.454%	10 Year	2.084%
30 Year	1.692%	30 Year	2.564%

US Economic Data

07:00 AM	MBA Mortgage Applications, Jun 14  Survey: —  Actual: -3.40% Prior: 26.80%
02:00 PM	FOMC Rate Decision (Upper Bound), Jun 19  Survey: 2.50%  Actual: — Prior: 2.50%
	FOMC Rate Decision (Lower Bound), Jun 19  Survey: 2.25%  Actual: — Prior: 2.25%

Canadian Economic Data

08:30 AM	CPI NSA MoM, May  Survey: 0.10%  Actual: — Prior: 0.40%
	CPI YoY, May  Survey: 2.10%  Actual: — Prior: 2.00%
	Consumer Price Index, May  Survey: 136.2  Actual: — Prior: 136.0

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

Tsys surging higher, following EGBs after ECB Draghi hints on potential stimulus if outlook doesn’t improve, US 10Y 2.025% (-7bps) lowest since Sep 2017, curve bull flattening. Euro equities 1.5% higher, S&P futures +17, crude unch.  Draghi comments and six month low in German ZEW expectations push German bund yields to record lows, 10Y -0.32%, French 10Y 0.0% for first time. With FOMC tomorrow odds of a rate cut now almost fully priced for July. Focus will be on removal of the word ‘patient’ signalling more of a dovish shift, as well as dot plots.  GOCs higher,  in line with tsys, 10Y below 1.40% for first time since May 2017.  Today sees April manufacturing sales ahead of CPI tomorrow and April Retail Sales Friday.

News headlines

Stocks, Bonds Climb as Draghi Fuels Stimulus Hopes: Markets Wrap (Bloomberg) Stocks climbed and bonds rallied on Tuesday as comments from ECB officials added fuel to investors’ hopes for easier monetary policies from the world’s biggest central banks.

Draghi puts further ECB easing firmly on the table (Reuters) The European Central Bank will ease policy again if inflation fails to accelerate, ECB President Mario Draghi said on Tuesday, signaling one of the biggest policy reversals of his eight-year tenure.

CANADA STOCKS-TSX futures up on rising gold prices ahead of Fed meeting (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Tuesday, as gold prices edged up on hopes of a rate cut from the U.S. Federal Reserve, which begins its two-day interest rate meeting later in the day.

For Fed’s Powell, a gap with markets and Trump may need explaining (Reuters) Bond investors expect an aggressive set of U.S. interest rate cuts this year, and a voluble president pines for the “old days” when his predecessors bullied central bankers to get their way.

EU trade surplus with U.S. expands, deficit with China larger (Reuters) The European Union’s trade surplus in goods with the United States increased in the first four months of 2019 while its deficit with China widened, figures that could further strain global tensions.

Oil prices slip for second day on global growth fears (Reuters) Oil prices fell for a second day on Tuesday on signs that global economic growth is being hit by the U.S.-China trade war, though losses were capped by Middle East tensions after last week’s tanker attacks.

German 10-yr yield hits -0.30% on Draghi’s stimulus klaxon (Reuters) The euro dropped and German government bond yields hit -0.30% for the first time on Tuesday after European Central Bank chief Mario Draghi said the bank would provide more stimulus if inflation failed to pick up.

Market Overview: US 10yr note futures are up 0.417% at 127-28, S&P 500 futures are up 0.63% at 2914.5, Crude oil futures are down -0.13% at $51.86, Gold futures are up 0.77% at $1353.3, DXY is up 0.16% at 97.71, CAD/USD is up 0.04% at 0.7452.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.356%	2 Year	1.811%
5 Year	1.282%	5 Year	1.781%
10 Year	1.387%	10 Year	2.022%
30 Year	1.649%	30 Year	2.519%

US Economic Data

08:30 AM	Housing Starts, May  Survey: 1240k  Actual: — Prior: 1235k
	Housing Starts MoM, May  Survey: 0.40%  Actual: — Prior: 5.70%
	Building Permits, May  Survey: 1293k  Actual: — Prior: 1296k
	Building Permits MoM, May  Survey: 0.20%  Actual: — Prior: 0.60%

Canadian Economic Data

08:30 AM

Manufacturing Sales MoM, Apr Survey: 0.40%  Actual: — Prior: 2.10%

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

Tsys  trading weaker, yet have rebounded close to highs of European session, on light volume in TY futures (260k),10Y 2.095% (+1.2bps).  US equity futures slightly higher (S&P +3.5), crude ~1.0% lower. Data today second tier with June Empire Man, NAHB & TIC flows.  GOCs moving higher with tsys, 10Y 1.44%.  Expect more provincial issuance with all in yields low and  relative lack of corp supply.

News headlines

S&P Futures Drift as Focus Turns to Central Banks: Markets Wrap (Bloomberg) U.S. equity futures drifted on Monday while European stocks edged lower following a mixed session in Asia as a big week for central-bank policy gets underway. Treasuries fell and the dollar was steady.

ECB Officials Say Bank Ready to Act Amid ‘Alarming’ Market Signs (Bloomberg) European Central Bank policy makers said the institution will act if needed to support the economy, keeping alive the possibility of interest-rate cuts or quantitative easing returning to the euro area.

Fed likely to resist pressure to cut U.S. rates this week (Reuters)  The U.S. Federal Reserve, facing fresh demands by President Donald Trump to cut interest rates, is expected to leave borrowing costs unchanged at a policy meeting this week but possibly lay the groundwork for a rate cut later this year.

Stocks, dollar hold gains with all eyes on Fed meeting (Reuters) Share markets couldn’t add to recent gains and government bond yields inched fractionally higher on Monday, as investors hunkered down for what is shaping up to be a crucial week for global monetary policy.

China pulls WTO suit over claim to be a market economy (Reuters) China has halted a dispute at the World Trade Organization over its claim to be a market economy, a panel of three WTO adjudicators said on Monday, meaning Beijing must accept continued EU and U.S. “anti-dumping” levies on cheap Chinese goods.

BOJ to stand pat even as trade war, dovish Fed cloud outlook (Reuters) The Bank of Japan is expected to maintain its massive stimulus program on Thursday and signal its readiness to ramp up monetary support if growing risks such as the escalating U.S.-China trade war threaten the economy’s modest expansion.

Iran, Russia talks raise hopes of progress on OPEC+ meeting date (Reuters) Iran’s oil minister is scheduled to meet his Russian counterpart in Iran later on Monday, industry sources said, raising hopes of progress in resolving a month-long impasse over when OPEC and its allies will hold their next policy gathering.

Market Overview: US 10yr note futures are up 0.012% at 127-10, S&P 500 futures are up 0.1% at 2897.75, Crude oil futures are down -0.86% at $52.06, Gold futures are down -0.08% at $1343.4, DXY is down -0.16% at 97.42, CAD/USD is down -0.07% at 0.7462.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.389%	2 Year	1.867%
5 Year	1.334%	5 Year	1.851%
10 Year	1.442%	10 Year	2.094%
30 Year	1.697%	30 Year	2.592%

US Economic Data

08:30 AM	Empire Manufacturing, Jun  Survey: 10.5  Actual: -8.6 Prior: 17.8
	NAHB Housing Market Index, Jun  Survey: 67  Actual: — Prior: 66
04:00 PM	Net Long-term TIC Flows, Apr  Survey: $30.8b  Actual: — Prior: -$28.4b
	Total Net TIC Flows, Apr  Survey: —  Actual: — Prior: -$8.1b

Canadian Economic Data

08:30 AM	Int’l Securities Transactions, Apr  Survey: —  Actual: -12.80b Prior: -1.49b
10:00 AM	Bloomberg Nanos Confidence, Jun 14  Survey: —  Actual: — Prior: 56.4

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