Comments
13/05/2019
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
10/05/2019
Market Update
US tsys slightly lower, near top of narrow range overnite, 10Y 2.445%, heavy volume in TY futures (670k), US/China trade and Trump tweets making headlines with the US raising tariffs on $200bln in Chinese goods and the Chinese threatening to retailiate. US April CPI forecast to have risen 0.4% , unch from March with the y/y moving up to 2.1% from 1.9%, the main culprit being another solid monthly increase in retail gas prices (10% in April). Also multiple Fed speakers – Bostic, Brainard and Williams. GOCs slightly wider vs tsys before April Employment – 11.6k exp vs -7.2k in March., with the unemployment rate unch at 5.8%.
News headlines
Trump Ends China Trade Truce as Both Sides Plan More Tariffs (Bloomberg) President Donald Trump boosted tariffs Friday on $200 billion in goods from China and was preparing more in his most dramatic steps yet to extract trade concessions, saying there’s “no need to rush” a deal even though the uncertainty is roiling markets and clouding the global economy.
U.S. Stock Futures Decline as Europe, Asia Rebound: Markets Wrap (Bloomberg) U.S. equity futures dropped on Friday, bucking a rebound in stocks from Europe to Asia as investors scrambled to gauge the outlook for the latest round of trade talks.
Oil Shrugs Off U.S. Tariff Hike to Climb on Tighter Supply (Bloomberg) Oil pushed higher even after the U.S. went ahead with a planned tariff increase on Chinese goods, as rising tensions in Iran and elsewhere kept the supply outlook tight.
U.S. escalates trade war amid negotiations, China says will hit back (Reuters) The United States escalated a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal.
Pre-Brexit rush by factories boosts UK economy in early 2019 (Reuters) Britain’s economy got a sharp one-off boost in the first three months of 2019, official figures showed on Friday, as manufacturers rushed to deliver orders before a Brexit that never came.
EU commissioner says agriculture not on agenda for U.S. talks (Reuters) The European Union intends to keep agriculture off the agenda in its trade talks with the United States and continues to support rules-based, open and predictable international commerce, the EU’s agriculture commissioner said on Friday.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.587% | 2 Year | 2.254% |
| 5 Year | 1.56% | 5 Year | 2.24% |
| 10 Year | 1.686% | 10 Year | 2.446% |
| 30 Year | 1.932% | 30 Year | 2.873% |
US Economic Data
| 08:30 AM | CPI MoM, Apr Survey 0.40% Actual: 0.3% Prior 0.40% |
| CPI Ex Food and Energy MoM, Apr Survey 0.20% Actual: 0.1% Prior 0.10% | |
| CPI YoY, Apr Survey 2.10% Actual: 2.0% Prior 1.90% | |
| CPI Ex Food and Energy YoY, Apr Survey 2.10% Actual: 2.1% Prior 2.00% | |
| CPI Core Index SA, Apr Survey 261.884 Actual: 261.735 Prior 261.374 | |
| CPI Index NSA, Apr Survey 255.800 Actual: 255.548 Prior 254.202 | |
| 02:00 PM | Monthly Budget Statement, Apr Survey $160.5b Prior $214.3b |
Canadian Economic Data
| 08:30 AM | Building Permits MoM, Mar Survey 2.40% Actual: 2.1% Prior -5.70% |
| Net Change in Employment, Apr Survey 11.6k Actual: 106.5k Prior -7.2k | |
| Unemployment Rate, Apr Survey 5.80% Actual: 5.7% Prior 5.80% | |
| Participation Rate, Apr Survey 65.7 Actual: 65.9 Prior 65.7 | |
| Full Time Employment Change, Apr Survey — Actual: 73 Prior -6.4 | |
| Part Time Employment Change, Apr Survey — Actual: 33.6 Prior -0.9 |
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
09/05/2019
Market Update
US tsys higher on rising trade tensions between the US & China, after Trump said China ‘broke the deal’ last nite, 10Y 2.45% (-3.5bps). Risk-off with US equities lower, S&P futures -21, European equities -1.0%, while the MSCI Asia Pacific index fell for a third day to the lowest since March 29th. C ore EGBs higher, lagging tsys, yields 1-2bps lower, quiet day for European data. In the US April PPI & jobless claims, as well as $19bln 30Y US t-bond auction at 1:00ET – Yesterday’s $27bln 10Y auction saw the second tail in a row, awarded at 2.479% 2.465% WI. Competition from US corporate issuance – IBM issuing $20bln bringing the weekly total to $44.5bln the largest in eight months. GOCs higher, 1bp wider vs tsys, GOC curve 1bp flatter 2s10s, the narrowest in five weeks, 10s30s bucking the flattening trend over the last week, ~3bps steeper.
News headlines
As tariff hike looms, China asks U.S. to meet it halfway, denies backtracking (Reuters) China appealed to the United States to meet it halfway to salvage a deal that could end their trade war, with its chief negotiator in Washington for two days of talks hoping to stave off U.S. tariff increases set to be triggered on Friday.
Trump says Beijing ‘broke’ trade talk deals, pledges to keep tariffs on Chinese goods (Reuters) U.S. President Donald Trump said on Wednesday that China “broke the deal” it had reached in trade talks with the United States, and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing “stops cheating our workers.”
Stocks Drop, Treasuries Gain as Fresh Tariffs Loom: Markets Wrap (Bloomberg) Stocks dropped globally and U.S. equity futures retreated on Thursday as a deadline approached for America and China to raise reciprocal tariffs. The yen climbed with gold and Treasuries as investors sought havens, while the yuan fell to its weakest since January.
CANADA STOCKS-Futures down ahead of crucial U.S.-China trade talks (Reuters) Futures for Canada’s main stock index dipped on Thursday ahead of crucial trade talks between the United States and China, with investors waiting to see if the world’s largest economies can avoid further worsening of the trade war.
Oil Drops as Trump’s Battle With China Offsets Iranian Tensions (Bloomberg) Oil fell as flaring trade tensions between the world’s two biggest economies overshadowed concerns over supply disruptions from Iran to Venezuela.
New Colorado environmental law stalls oil investment (Reuters) New environmental regulations in Colorado have chilled investment in the state’s oil and gas fields as companies grapple with how local officials will respond to a law giving them more power to restrict energy production.
China to bid on D.C. Metro rail deal as national security hawks circle (Reuters) China’s CRRC plans to bid on a big Washington D.C. subway project as it doubles down on a charm campaign in the United States to quash a rising chorus of critics who have cast the rail car maker as a threat to cyber security and U.S. industry.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.578% | 2 Year | 2.264% |
| 5 Year | 1.543% | 5 Year | 2.247% |
| 10 Year | 1.672% | 10 Year | 2.446% |
| 30 Year | 1.931% | 30 Year | 2.865% |
US Economic Data
| 08:30 AM | PPI Final Demand MoM, Apr Survey 0.30% Prior 0.60% |
| PPI Ex Food and Energy MoM, Apr Survey 0.20% Prior 0.30% | |
| PPI Final Demand YoY, Apr Survey 2.30% Prior 2.20% | |
| PPI Ex Food and Energy YoY, Apr Survey 2.50% Prior 2.40% | |
| Trade Balance, Mar Survey -$50.1b Prior -$49.4b | |
| Initial Jobless Claims, May 4 Survey 220k Prior 230k | |
| Continuing Claims, Apr 27 Survey 1670k Prior 1671k | |
| 09:45 AM | Bloomberg Consumer Comfort, May 5 Survey — Prior 60.4 |
| 10:00 AM | Wholesale Inventories MoM, Mar F Survey 0.00% Prior 0.00% |
Canadian Economic Data
| 08:30 AM | Int’l Merchandise Trade, Mar Survey -2.40b Prior -2.90b |
| New Housing Price Index MoM, Mar Survey 0.00% Prior 0.00% |
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