Comments
16/05/2019
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
15/05/2019
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
14/05/2019
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