Commentaires matinaux

Market Update

Tsy yields ~1bp lower, 10Y 2.115%, average volume in TY futures (350k) with equity futures  +0.30%, crude  3.6% on suspected attack on two oil tankers in Gulf of Oman. Core Euro bond higher led by UK gilts, yields now ~3bps lower on the day, while bunds lack direction with the 10Y bund 0.245%.  Focus in the US on May import prices and $16bln 30Y bond auction at 1:00ET. GOCs higher in line with tsys 10Y 1.48%. GOC 5s30s curve 13bps flatter since month end, while the US is 14bps steeper, the 5s30s box is -36bps or -2.3 stds rich on a five year basis (GOC curve relatively flat),  long outperformance on the GOC curve noteworthy. CMB 5Y pricing today in the area of 33.5bps.  CIBC 10NC5 NVCC issue yest @ 155 now 153/150. MCAP issued $100mln 5s @ 275  or 50bps vs MCAP 22s.  Needless to say this ‘yieldy’ paper did well on the brak comign in ~10bps.

News headlines

Brexiteer Boris Johnson far ahead in first round of contest to replace UK PM (Reuters) Boris Johnson, who has pledged to deliver Brexit on Oct. 31, edged closer to power on Thursday when he won by far the most support from Conservative Party lawmakers in the first round of the contest to replace Prime Minister Theresa May.

Oil surges after Gulf tanker attacks, stocks claw higher (Reuters) Suspected attacks on two tankers off the coast of Iran saw oil markets erupt out of their recent slump on Thursday and kept traders gobbling up ultra-safe government bonds, gold and the Japanese yen. Oil tanker attacks in Gulf of Oman fuel security, oil supply fears.

China says won’t yield to any U.S. pressure over trade (Reuters) China’s commerce ministry said on Thursday Beijing will not yield to any “maximum pressure” from Washington, and any attempt by the United States to force China into accepting a trade deal will fail.

Chinese vice premier urges more support for economy amid trade war (Reuters) Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure.

Majority of Canada’s exporters see global recession, EDC finds (BNNBloomberg) Canadian exporters are reporting widespread concerns about a global recession, with sentiment in the sector falling to the lowest level in seven years, according to a survey by the country’s export financing agency. Export Development Canada’s trade confidence index, a composite gauge based on a bi-annual survey of 1,000 businesses, dropped to 69.8, compared with 73.7 at the end of last year. It’s the lowest reading since 2011 and the second lowest since the last recession a decade ago.

Market Overview: US 10yr note futures are up 0.135% at 127-05, S&P 500 futures are up 0.23% at 2891.5, Crude oil futures are up 4.18% at $53.28, Gold futures are up 0.21% at $1339.6, DXY is down -0.05% at 96.95, CAD/USD is down -0.28% at 0.7515.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.435%	2 Year	1.868%
5 Year	1.379%	5 Year	1.858%
10 Year	1.483%	10 Year	2.108%
30 Year	1.742%	30 Year	2.606%

US Economic Data

08:30 AM	Import Price Index MoM, May  Survey: -0.20%  Prior: 0.20%
	Export Price Index MoM, May  Survey: -0.20%  Prior: 0.20%
	Initial Jobless Claims, 39600  Survey: 215k  Prior: 218k
	Continuing Claims, 37043  Survey: 1660k  Prior: 1682k
09:45 AM	Bloomberg Consumer Comfort, 39965  Prior: 6170.00%

Canadian Economic Data

08:30 AM	New Housing Price Index MoM, Apr  Survey: 0.00%  Prior: 0.00%
	New Housing Price Index YoY, Apr  Survey: 0.10%  Prior: 0.10%

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 higher, led by the short end with the curve 2bps steeper, 10Y 2.12% (-2.5bps) before May CPI (0.1%, 1.9% exp).  US equity futures lower (S&P -8.5), crude falling to weekly low, -2.7% 51.84. API reported crude inventories rose for a second week by 4.85mln bbls vs forecasts of a 480k drawdown. GOCs higher in line with tsys, 10Y 1.51%. Corp and Provi supply impacting Can/US spreads which were out  ~2bps yest.  In provis $500mln HQ 55s , $200mln Sask 28s and $1bln Ont 29s (500mln carve out), spreads fairly solid at the tights  despite supply. In corps Fairfax issued $500mln 10Y @ 270 which looked fair (30 bps vs FFHCN 12/27s or 25bps/yr). Keyera Energy in the mkt with $600mn  60NC10 Hybrids at 6.875%.  Focus today on GOC 3Y auction ($2.4bln reopening of Can 1% Sep 2022)  with the S22/May21 roll -2.7bps

News headlines

Trump renews Fed attack, saying interest rates way too high (BNNBloomberg) President Donald Trump slammed the Federal Reserve for high interest rates in a tweet on Tuesday, complaining the euro and other currencies were “devalued” against the dollar. “The Fed interest rate way too high, added to ridiculous quantitative tightening! They don’t have a clue!” Trump said on Twitter, renewing his complaints about the U.S. central bank a week before it meets in Washington to discuss monetary policy.

The president also tweeted that the U.S. has “VERY LOW INFLATION,” calling it a “beautiful thing!

South Korea’s won is Asia’s whipping boy in U.S.-China trade war (Reuters) South Korea’s exposure to a stressed global manufacturing supply chain has knocked its currency – Asia’s most risk sensitive – to over two-year lows as investors use it as a proxy to bet on the economic costs of a protracted U.S.-China trade war.

U.S. Commerce Secretary says Fed’s last rate hike was ‘premature’: Bloomberg TV (Reuters) U.S. Commerce Secretary Wilbur Ross said in a television interview on Wednesday the Federal Reserve should reconsider its last rate increase, which he said was premature. “I think the Fed taking a more cautious attitude on rates and reconsidering, in effect, the last rate increase that they put in, I think that’s good. I think they should reconsider. I think it’s quite likely that that last increase was, at best, premature,” Ross told Bloomberg TV.

U.S. mortgage applications jump to highest since September 2016: MBA (Reuters) U.S. mortgage applications jumped to their highest level in more than 2-1/2 years last week, led by a surge in refinancing activity, as some home borrowing costs tumbled to their cheapest level since September 2017, the Mortgage Bankers Association said on Wednesday.

Turkey’s central bank cites ‘disinflation’ as it holds rates (Reuters) Turkey’s central bank on Wednesday left its key interest rate unchanged at 24% as expected and said it will keep its policy stance tight to “reinforce the disinflation process,” a somewhat more upbeat assessment than its past statement.

Market Overview: US 10yr note futures are up 0.099% at 126-30, S&P 500 futures are down -0.27% at 2883.25, Crude oil futures are down -2.8% at $51.78, Gold futures are up 0.44% at $1337, DXY is up 0.02% at 96.707, CAD/USD is up 0.09% at 0.7521.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.461%	2 Year	1.899%
5 Year	1.415%	5 Year	1.887%
10 Year	1.52%	10 Year	2.124%
30 Year	1.768%	30 Year	2.602%

US Economic Data

07:00 AM	MBA Mortgage Applications, 39234    Actual: 26.80% Prior: 1.50%
08:30 AM	CPI MoM, May  Survey: 0.10%   Prior: 0.30%
	CPI Ex Food and Energy MoM, May  Survey: 0.20%   Prior: 0.10%
	CPI YoY, May  Survey: 1.90%   Prior: 2.00%
	CPI Ex Food and Energy YoY, May  Survey: 2.10%   Prior: 2.10%
	CPI Core Index SA, May  Survey: 26228.00%   Prior: 26173.50%
	CPI Index NSA, May  Survey: 25617.90%   Prior: 25554.80%
	Real Avg Hourly Earning YoY, May  Prior: 1.20%
	Real Avg Weekly Earnings YoY, May  Prior: 0.90%
10:30 AM	DOE U.S. Crude Oil Inventories, 39234  Survey: -1000k   Prior: 6771k
	DOE U.S. Gasoline Inventories, 39234  Survey: 950k   Prior: 3205k
02:00 PM	Monthly Budget Statement, May  Survey: -$202.5b   Prior: -$146.8b

Canadian Economic Data

There is no CDA 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 trading lower, yields 2-2.5bps higher for a second day, stocks higher in Europe led by car makers, Shanghai Comp +2.5%. Core Euro bonds mixed, UK gilts weaker from the start -UK employment rose 3.8% in April the largest one month rise since May 2008 with unemployment rate unch at record low 3.8% below the BOE’s 3.9% forecast.  GOCs lower in line with tsys, 10Y 1.54%. In the US May PPI expected to have risen 0.1% bringing the y/y rate back to 2.0% from 2.2% in April. The US auctions $38bln in 3 year notes at 1:00ET.

News headlines

Under pressure, Fed faces an outlook clouded by trade wars and signs of weakness (Reuters) U.S. President Donald Trump’s attacks on the Federal Reserve have broken one set of precedents, his talk of stacking the central bank with political allies has strained another, and his on-again off-again tariff threats have made the economic outlook harder than ever to predict.

Battered Beyond Meat bears are grappling with an ‘extraordinarily rare’ situation where it’s more expensive to short the stock than own it (BI) Not everyone is happy with Beyond Meat’s soaring stock price. Short-sellers, or traders who have bet against the best-performing initial public offering of the year, have lost hundreds of millions of dollars as the stock has climbed to more than 600% of its initial IPO price of $25 a share.

Canaccord to buy Australian securities business Patersons for $23M (BNN) Canaccord Genuity Group Inc. has struck a deal to acquire Australian financial services firm Patersons Securities Ltd. for roughly $23 million in cash. The Melbourne-based securities business has operations in wealth management and capital markets. Canaccord chief executive Dan Daviau says the addition of Patersons is part of its strategy to increase the scale of its wealth management operations and improve its business mix in Australia.

SNC-Lavalin names interim CEO as Neil Bruce steps aside (BNN) The chief executive officer of SNC-Lavalin Group Inc. is leaving the embattled engineering and construction giant. Neil Bruce is stepping aside, effective immediately, and will return to his family in the United Kingdom, SNC announced Tuesday morning. He’s being replaced on an interim basis by Chief Operating Officer Ian Edwards, who has been tasked with a full review of the company’s strategic direction.

Exclusive: Top Japanese chip gear firm to honor U.S. blacklist of Chinese firms – executive (Reuters) Japan’s Tokyo Electron, the world’s No.3 supplier of semiconductor manufacturing equipment, will not supply to Chinese clients blacklisted by Washington, a senior company executive told Reuters.

World shares rally again on Trump tariff relief, Fed hopes (Reuters) World shares rallied on Tuesday to hold near one-month highs, with German carmakers outperforming and Wall Street looking to extend gains after the United States stepped back from imposing tariffs on Mexico.

UK April pay data beats forecasts, employment growth slow (Reuters) British wages in the three months to April grew faster than expected and hiring slowed less sharply, as the jobless rate held at its lowest rate since 1975, official figures showed on Tuesday.

Market Overview: US 10yr note futures are down -0.123% at 126-19, S&P 500 futures are up 0.52% at 2904.25, Crude oil futures are up 1.13% at $53.86, Gold futures are down -0.3% at $1325.3, DXY is up 0.02% at 96.777, CAD/USD is down -0.07% at 0.7542.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.485%	2 Year	1.922%
5 Year	1.433%	5 Year	1.929%
10 Year	1.54%	10 Year	2.164%
30 Year	1.786%	30 Year	2.646%

US Economic Data

06:00 AM	NFIB Small Business Optimism, May  Survey: 102.00  Actual: 105.00 Prior: 103.50
08:30 AM	PPI Final Demand MoM, May  Survey: 0.10%  Prior: 0.20%
	PPI Ex Food and Energy MoM, May  Survey: 0.20%  Prior: 0.10%
	PPI Final Demand YoY, May  Survey: 2.00%  Prior: 2.20%
	PPI Ex Food and Energy YoY, May  Survey: 2.30%  Prior: 2.40%

Canadian Economic Data

There is no CDA economic data for today. c

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