Commentaires matinaux

Market Update

US tsys higher, yields 1-2.5bps lower led by the short end with S&P futures moving deeper into the red (-12) and crude down ~1.0%. The trump administration is considering limits on China’s video surveillance firm Hikvision ability to use US technology. Qualcomm fell 12% after a US judge ruled the company’s licencing practices are anti competitive.  St Louis Fed Pres Bullard said the Fed may have ‘overdone it’ when it raised rates in Dec. FOMC minutes for the May 1st meeting are scheduled for 2:00ET. Powell sought to contain expectations for a rate cut, saying the slowing in inflation was due to transitory factors.   In Canada, GOCs are higher, lagging the rise in tsys by ~1bp in the short end, Can/US 3-5bps wider over the week.  March Retail Sales forecast to have risen 1.2% vs 0.8% in Feb, mostly due to gas prices. The BOC auctions $700mln in  Dec 2050 rrbs at noon with long breakevens  trading in the low 140s, real yields ~0.54%.

News headlines

U.S. Stock Futures Edge Down as Tech Tensions Grow: Markets Wrap (Bloomberg) U.S. equity futures dipped and European stocks fluctuated after a mixed session in Asia as investors digested the latest in the Sino-American confrontation over technology. Oil declined while the dollar and Treasuries were steady before the latest Fed minutes.

CANADA STOCKS-TSX futures lower as oil prices slip (Reuters) Stock futures for Canada’s main equity index edged lower on Wednesday as oil prices fell due to an increase in U.S. crude inventories and on demand worries related to the U.S.-China trade war.

Oil Falls as Deepening Trade War Stokes Fear Over Global Growth (Bloomberg) Oil fell on signs the worsening U.S.-China trade war will take a toll on global economic growth, overshadowing the prospect of OPEC and its allies extending production curbs.

In Fed policy review, labor may finally win out over inflation (Reuters) At 2.3 percent, Minneapolis’ jobless rate seems impossibly low, even with national unemployment at a 50-year trough.

Prepare for difficult times, China’s Xi urges as trade war simmers (Reuters) China must prepare for difficult times as the international situation is increasingly complex, President Xi Jinping said in comments carried by state media on Wednesday, as the U.S.-China trade war took a mounting toll on tech giant Huawei.

British Steel goes into liquidation after failing to secure loan (Reuters) British Steel, the country’s second largest steel producer, has collapsed after failing to secure emergency government funding, jeopardising some 25,000 jobs, Britain’s Official Receiver said on Wednesday.

Dollar near one-month highs before Fed minutes; pound dives (Reuters) The dollar held near a one-month high on Wednesday as trade tensions between the world’s two biggest economies remained high before Fed minutes that may give more clues on what prompted U.S. policymakers to strike a broadly neutral stance this month.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.675%	2 Year	2.235%
5 Year	1.638%	5 Year	2.211%
10 Year	1.746%	10 Year	2.416%
30 Year	1.967%	30 Year	2.838%

US Economic Data

07:00 AM	MBA Mortgage Applications, May 17 Actual 2.4% Prior -0.60%
02:00 PM	FOMC Meeting Minutes, May 1

Canadian Economic Data

08:30 AM	Retail Sales MoM, Mar Survey 1.20% Prior 0.80%
	Retail Sales Ex Auto MoM, Mar Survey 0.90% Prior 0.60%

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, 10Y 2.43% (+1.5bps) , above avg volume in TY futures (425k), US equity futures higher, S&P +13. US/China trade tensions moderated somewhat as the US eases some restrictions on Huawei according to WSJ article.  Core EGBs lower, 10Y gilt 2bps higher, PM May to unveil new proposal for getting Brexit deal through Parliament. GOCs lower, yields 4-5bps higher in catch-up mode  with the US after Cdn mkt close yest.  No Cdn data today, March Retail Sales tomorrow (1.2% exp vs 0.8% Feb). On Friday , BOC Poloz said there is still underlying stregth in the Cdn economy and that the natural tendency would be for rates to move higher leading to 1-2bp widening in Can/US by Friday afternoon.

News headlines

S&P Futures Climb With Europe Stocks; Bonds Mixed: Markets Wrap (Bloomberg) U.S. equity futures and European stocks advanced on Tuesday following a mixed session in Asia as the trade-war driven turbulence that has dominated markets this month showed few signs of abating. The dollar strengthened while Treasuries slipped.

TSX futures rise on higher oil prices (Reuters) Stock futures for Canada’s main equity index rose on Tuesday, supported by higher oil prices which gained on escalating tensions between the United States and Iran.

Trump’s Huawei ban raises hopes for Chinese chip suppliers (Reuters) Washington’s blacklisting of technology giant Huawei has taken a toll on U.S. semiconductor shares, but China-listed firms have rallied as investors bet they can gain from Beijing’s stepped-up efforts to build a homegrown supply chain.

China rebuffs Trump claim U.S. tariffs are making firms leave (Reuters) Foreign investors remained enthusiastic about China, the foreign ministry said on Tuesday, following U.S. President Donald Trump’s claim that his tariffs are causing companies to move production away from the world’s second largest economy.

Canadian retaliatory tariffs lifted as U.S. kills steel aluminum penalties (BNN) Canada collected more than $1.27 billion from the retaliatory tariffs on U.S. products over the last year and all of it will go to the Canadian steel and aluminum industry even though the steel trade war with the United States is over.

Top U.S. Tech Companies Begin to Cut Off Vital Huawei Supplies (Bloomberg) The impact of the Trump administration’s threats to choke Huawei Technologies Co. reverberated across the global supply chain on Monday, hitting some of the biggest component-makers.

Russian Oil Sales to U.S. ‘on Steroids’ Amid Venezuela Sanctions (Bloomberg) Petroleum exports from Russia to the U.S. are growing rapidly as the supplier takes advantage of lost deliveries from sanctions-hit Venezuela and supply cuts by OPEC members.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.66%	2 Year	2.237%
5 Year	1.631%	5 Year	2.22%
10 Year	1.738%	10 Year	2.426%
30 Year	1.955%	30 Year	2.844%

US Economic Data

10:00 AM	Existing Home Sales, Apr Survey 5.35m Prior 5.21m
	Existing Home Sales MoM, Apr Survey 2.70% Prior -4.90%

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, May 17 Survey — Prior 54.7

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 slightly lower, 10Y 2.38%, tsy curve 2bps flatter, TY futures lower end of overnight range on above avg volume (450k), of note the 3M-10Y curve is inverted -1.8bps. Equity futures slightly higher, (S&P +0.25%) . April Housing starts & May Phili Fed highlight US macro data. After yesterday’s big moves, core EGBs stable, 10Y bund yield 0.5bps lower, Italy tighter. GOCs unch before March Man Sales/April ADP as well as the BOC’s Financial System Review.  Provis traded well yest on the back of the QC 51 deal @ 79 (77/76) and positive risk-on sentiment. 

News headlines

U.S. Stock Futures Turn Higher, Treasuries Decline: Markets Wrap (Bloomberg) U.S. equity futures turned higher on Thursday and Treasuries reversed a gain as trade headlines continued to whipsaw global markets. Stocks in Europe also rose, while most of the region’s sovereign bonds held their advance.

TSX futures up on higher oil prices (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Thursday, boosted by rising oil prices.

China slams U.S. blacklisting of Huawei as trade tensions rise (Reuters) China on Thursday slammed a decision by the U.S. government to put telecom equipment giant Huawei on a blacklist and said it will take steps to protect its companies, in a further test of ties as the economic heavyweights clash over trade.

Oil Climbs on Falling U.S. Gasoline Stockpiles and Gulf Tension (Bloomberg) Oil climbed for a third day — the longest run of gains in three weeks — as falling U.S. gasoline stockpiles supported the demand outlook and simmering tensions in the Middle East kept investors on edge.

EU goods surplus with U.S. eases, deficit with China widens (Reuters) The European Union’s trade surplus in goods with the United States decreased in the first three months of 2019, but its deficit with China widened, figures released on Thursday showed.

Iraq has contingency plans in case Iran gas imports halted: minister (Reuters) Iraq has contingency plans for any stoppage to Iranian gas imports for its power grid but hopes no such disruption will take place, Oil Minister Thamer Ghadhban said on Thursday.

Exclusive: Trump EPA did not await court ruling to loosen biofuel rules for refiners – documents (Reuters) The Trump administration made it easier for oil refineries to get waivers from the nation’s biofuel law at least four months before a 2017 court decision it often cites to justify the move to the corn lobby, and the move was motivated by a desire to save the oil industry money, Reuters has learned.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.588%	2 Year	2.18%
5 Year	1.543%	5 Year	2.163%
10 Year	1.664%	10 Year	2.38%
30 Year	1.901%	30 Year	2.822%

US Economic Data

08:30 AM	Housing Starts, Apr Survey 1209k Prior 1139k
	Housing Starts MoM, Apr Survey 6.20% Prior -0.30%
	Building Permits, Apr Survey 1289k Prior 1269k
	Building Permits MoM, Apr Survey 0.10% Prior -1.70%
	Philadelphia Fed Business Outlook, May Survey 9.0 Prior 8.5
	Initial Jobless Claims, May 11 Survey 220k Prior 228k
	Continuing Claims, May 4 Survey 1673k Prior 1684k
09:45 AM	Bloomberg Consumer Comfort, May 12 Survey — Prior 59.8

Canadian Economic Data

08:30 AM	Int’l Securities Transactions, Mar Survey — Prior 12.05b
	Manufacturing Sales MoM, Mar Survey 1.50% Prior -0.20%

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