Commentaires matinaux

Market Update

Tsys trading higher with equity futures weakening, US 10Y 2.375% (-3.5bps), five week low on above avg volume in TY futures (437k), the 2Y yield 2.16% lowest since Feb 2018.  Data in the US includes April Retail Sales & Empire Man. Overnight data from China driving risk off as Industrial Output, Retail Sales and Fixed Investment all came in weaker. Core European bonds outperforming, 10Y bund 5bps lower at -0.122bps , Italian yields continuing to move higher after Italian Deputy PM said Italy was prepared to break EU rules on deficits and debt to boost employment. GOCs higher, lagging tsys by 1bp before April CPI. Another solid reading expected – 0.4% m/m or 2.0% y/y , gas prices rose another 10% in April to the highest since June 2014. CMB dual tranche issue to price this morning – new 10Y fixed in the area of 46.5bps and 5Y FRN (WI 45.5/), spreads opening unch

News headlines

U.S. Futures, Europe Stocks Dip as Asia Advances: Markets Wrap (Bloomberg) U.S. equity futures slipped on Wednesday alongside European stocks as the rebound in global shares struggled for momentum. Oil declined, while Treasuries advanced with German bonds.

CANADA STOCKS-TSX futures flat ahead of monthly inflation data (Reuters) Futures for Canada’s main stock index were little changed on Wednesday ahead of April inflation data.

No easy options for China as trade war, U.S. pressure bite (Reuters) China is running out of options to hit back at the United States without hurting its own interests, as Washington intensifies pressure on Beijing to correct trade imbalances in a challenge to China’s state-led economic model.

Rising U.S. oil output helps fill gap left by Iran, Venezuela: IEA (Reuters) The world will require very little extra oil from OPEC this year as booming U.S. output will offset falling exports from Iran and Venezuela, the International Energy Agency said on Wednesday.

Fed officials pledge rate patience amid trade and Trump pressure (BNN) Federal Reserve officials are sticking with their pledge for patience on interest rates, shrugging off President Donald Trump’s escalating trade war and his pressure for a cut.

Oil Drops as U.S. Stockpile Report Counters Supply Risk in Gulf (Bloomberg) Oil fell as an industry report signaling a jump in U.S. stockpiles eased concerns over a supply crunch, even after a drone attack in Saudi Arabia highlighted the vulnerability of the country’s energy infrastructure.

Italian budget worries knock European shares lower (Reuters) Italian shares led losses in Europe on Wednesday after the country’s deputy prime minister said Rome was ready to break EU fiscal rules, masking early gains fueled by optimism around U.S.-China trade rhetoric.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.585%	2 Year	2.162%
5 Year	1.542%	5 Year	2.151%
10 Year	1.66%	10 Year	2.375%
30 Year	1.891%	30 Year	2.816%

US Economic Data

07:00 AM	MBA Mortgage Applications, May 10 Survey – Actual -0.6% Prior 2.70%
08:30 AM	Empire Manufacturing, May Survey 8.0 Prior 10.1
	Retail Sales Advance MoM, Apr Survey 0.20% Prior 1.60%
	Retail Sales Ex Auto MoM, Apr Survey 0.70% Prior 1.20%
	Retail Sales Ex Auto and Gas, Apr Survey 0.30% Prior 0.90%
09:15 AM	Industrial Production MoM, Apr Survey 0.00% Prior -0.10%
	Capacity Utilization, Apr Survey 78.70% Prior 78.80%
10:00 AM	NAHB Housing Market Index, May Survey 64 Prior 63
	Business Inventories, Mar Survey 0.00% Prior 0.30%
04:00 PM	Net Long-term TIC Flows, Mar Survey — Prior $51.9b
	Total Net TIC Flows, Mar Survey — Prior -$21.6b

Canadian Economic Data

08:30 AM	CPI NSA MoM, Apr Survey 0.40% Prior 0.70%
	CPI YoY, Apr Survey 2.00% Prior 1.90%
	Consumer Price Index, Apr Survey 135.9 Prior 135.4
09:00 AM	Existing Home Sales MoM, Apr Survey 1.80% Prior 0.90%

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-China trade talks continue to dominate with slightly more optimistic headlines suggesting talks were ongoing and that Trump was still willing to do a deal helped USTs to give up some of yesterday’s gains. However, moves have been much more muted than yesterday. – This morning the Fed’s Williams said that lower neutral rates would require « new policy approaches » and that tariffs are like a negative supply shock. George and Daly are both due to speak later today. The data calendar is light today with import/export price data the only notable release. Things heat up tomorrow with retail sales and IP due for release.

News headlines

S&P 500 Futures and Europe Stocks Jump; Havens Dip: Markets Wrap (Bloomberg) U.S. equity futures rose alongside European stocks on Tuesday, shrugging off losses in Asia as investors assessed the prospects for global trade in the wake of a brutal start to the week for markets. Haven assets including Treasuries, gold and the yen slipped.

TSX futures up on fresh hopes over U.S.-China trade talks (Reuters) Stock futures pointed to a slightly higher opening for Canada’s main stock index on Tuesday, steered by optimistic comments from the world’s two biggest economies over the trade war.

Oil Rises as Saudi Arabia Reports Drone Attacks on Pump Stations (Bloomberg) Oil rose as Saudi Arabia reported drone attacks on pumping stations, the latest escalation in Middle East tensions after tankers were hit by sabotage over the weekend.

China says U.S. has agreed to keep talking over trade war (Reuters) China and the United States have agreed to keep talking about their trade dispute, the Chinese government said on Tuesday, as U.S. President Donald Trump said he thought recent discussions in Beijing would be successful.

Fed’s Williams says policymakers need to better prepare for lower interest rate world (Reuters) Torturously slow recoveries from recessions and low inflation are here to stay unless policymakers can get a better grip on how to stabilize the global economy in an era of lower interest rates, a top Federal Reserve policymaker said on Tuesday.

Euro zone industry output dragged down by France, Italy (Reuters) Euro zone industrial production fell in March for a second straight month as output declined in France and Italy but recovered in the bloc’s largest economy, Germany, data from the European Union’s statistics agency showed on Tuesday.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.593%	2 Year	2.195%
5 Year	1.562%	5 Year	2.195%
10 Year	1.681%	10 Year	2.414%
30 Year	1.915%	30 Year	2.851%

US Economic Data

05:03 AM	NFIB Small Business Optimism, Apr Survey 102.0 Actual 103.5 Prior 101.8
08:30 AM	Import Price Index MoM, Apr Survey 0.70% Prior 0.60%
	Import Price Index YoY, Apr Survey 0.30% Prior 0.00%
	Export Price Index MoM, Apr Survey 0.60% Prior 0.70%
	Export Price Index YoY, Apr Survey — Prior 0.60%

Canadian Economic Data

08:30 AM

Teranet/National Bank HPI MoM, Apr Survey — Prior -0.30%

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

Latest headlines China to raise tariffs by 5%-25% on nearly 2,500 US goods spurs bid in Tsys, new highs. Risk assets in retreat while Tsys trading around late overnight highs on moderate volume (TYM>350k), narrow range after initial risk-off bounce as US/China trade angst resumed Sunday (Trump gives China a month to agree on a trade deal, threatens more tariffs; China blames Trump for trade set-backs).  VIX rebounds (+2.70, 18.74) still well off last wk 4M highs (23.38); equities weak (ESM9 -39.25, 2847.75) compares to Fri 2826.5L. Slow start for data, week ahead focus is largely on Wednesday with April retail sales, industrial production and capacity utilization and May Empire Manufacturing Index.  The 2-Yr yield is down 4.7bps at 2.2191%, 5-Yr is down 4.9bps at 2.2148%, 10-Yr is down 4.1bps at 2.4263%, and 30-Yr is down 2.9bps at 2.8579%.

News headlines

Stocks Slump, Treasuries Up as Trade Clouds Darken: Markets Wrap (Bloomberg) U.S. equity futures slumped and stocks declined across Europe and Asia as investors digested the latest escalation of the global trade war. The yuan tumbled, while Treasuries rallied.

CANADA STOCKS-TSX futures edge lower on trade deal uncertainties (Reuters) Futures for Canada’s main stock index pointed to a lower opening on Monday, as the United States and China appeared to be at a deadlock over trade negotiations.

Oil Rises as Middle East Tanker Attacks Add to Political Risks (Bloomberg) Brent crude oil rallied after Saudi Arabia said two of its tankers were attacked on Sunday, adding to the mounting geopolitical risks in the market.

China says will ‘never surrender’ on trade, Trump warns against retaliation (Reuters) U.S. President Donald Trump on Monday warned Beijing not to retaliate in an escalating trade dispute after China said it “will never surrender to external pressure.”

European shares hit seven-week lows amid U.S.-China trade standoff (Reuters) European shares extended losses early on Monday from the biggest weekly slump this year as the U.S.-China deadlock quelled hopes that the two largest economies will be able to resolve their trade dispute anytime soon.

Futures extend losses after China plans retaliation (Reuters) U.S. stocks futures extended losses on Monday after China said it planned to set import tariffs against $60 billion worth of U.S. goods.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.61%	2 Year	2.211%
5 Year	1.58%	5 Year	2.207%
10 Year	1.696%	10 Year	2.421%
30 Year	1.925%	30 Year	2.854%

US Economic Data

There is no US Economic data for today.

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, May 10 Survey – Prior 54.9

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