Commentaires matinaux

Market Update

US tsys rallying, yields 2-3bps lower, moving higher with German bunds, 10Y 2.54% (-2.5bps), TY futures near top of range on heavy volume (420k), block trade in 5Y futures 6K FVM9 ($283k DV01) at 8:11. Equity futures unch, DOW futures higher with Boeing (+1.7%), even thou the company missed estimates and announced it is pausing share buybacks. Bunds/Gilts higher after Apr IFO missed estimates, current conditions lowest in two years.  GOCs higher, outperforming tsys out the curve by 1-1.5bps, 10Y 1.70% before BOC decision &MPR at 10:00ET.  The overnight rate is expected to remain unch at 1.75%, with the statement likely to remove the tightening bias from March, along with downward adjustment to 2019 GDP growth from 1.7% in Jan. Provi spds unch, Ont 10Y deal yest @ 72 now 72.5/71.5, QC 10s or longs rumoured.  Yest we pointed to the attractive all in  pick selling Ont 23s to buy Ont 28s – 30.8 credit pick is top of 6 mnth range while the underlying 5s10s GOC curve (23s28s) has spiked since April 1st to 16bps (Z-2.8), so a decent flattener play involving Ontarios.

News headlines

Futures dip ahead of BoC’s interest rate decision (Reuters) Futures for Canada’s main stock index inched lower on Wednesday, ahead of Bank of Canada’s interest rate decision and amid a drop in oil prices and global equities.

Stocks Struggle; Bonds Gain as Dollar Strengthens: Markets Wrap (Bloomberg) U.S. equity futures drifted in the wake of Tuesday’s record close, European stocks fluctuated and Asian benchmarks were mixed as investors assessed corporate news and economic data. Treasuries climbed alongside European sovereign bonds and the dollar extended its rally to a six-week high.

Top U.S. officials to hold trade talks in China next week (Reuters) U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for trade talks beginning on April 30, the White House said in a statement on Tuesday.

New round of U.S. tariffs a ‘modest’ hit for euro area: ECB (Reuters) A new round of tariffs between the United States and its main partners would only cause a “modest decrease” in the pace of economic growth in the euro zone, according to research by the European Central Bank.

Bank of Canada’s Poloz poised to put rates on prolonged pause (BNN) Bank of Canada Governor Stephen Poloz is widely expected to cement expectations for a prolonged pause on interest rates on Wednesday, as the nation’s economy grapples with a slowdown.

Oil Slides as U.S. Supplies Allay Fears Over Iran Sanctions (Bloomberg) Oil pulled back from a six-month high as an industry report signaling a gain in U.S. crude inventories partly offset concerns over America’s campaign to halt Iranian exports.

European shares hit highest since August on Credit Suisse, SAP (Reuters) World shares pared back losses on Wednesday as positive earnings in Europe from Credit Suisse and investor support for SAP helped soothe worries that China has put broader stimulus on hold.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.541%	2 Year	2.332%
5 Year	1.526%	5 Year	2.329%
10 Year	1.707%	10 Year	2.538%
30 Year	2.021%	30 Year	2.959%

US Economic Data

07:00 AM

MBA Mortgage Applications, Apr 19 Survey – Actual -7.3% Prior -3.50%

Canadian Economic Data

10:00 AM

Bank of Canada Rate Decision, Apr 24 Survey 1.75% Prior 1.75%

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, down in recent trade as stock futures erase losses (S&P +4), US10Y 2.59%, below avg volume in TY futures (290k).  Second tier data today with Phili Fed non-man index, Richmond Fed & March New Home Sales.  The latter have rebounded 20% since hitting a two year low in Oct, with lower l.t. mortgage rates the main driver. In Canada, 10Y yields ~1.80%, curve continuing to steepen led by 10s, 5s10s +4bps over the week. BOC/MPR tomorrow – expect BOC to leave rates unch – the Bank seems to be caught between a confluence of offsetting factors – firming signs of inflation as well as building slack in the economy and an over indebted housing sector.  In provis, supply from Ont & QC a possibility – spreads holding near recent tights, provi curve steeper along with underlying GOC curve.

News headlines

U.S. may follow China with first quarter GDP upside surprise (Reuters) A temporary government shutdown with no end in sight, rising trade conflicts and a global growth slowdown: the first quarter outlook for the U.S. economy did not look promising at the turn of the year.

TSX futures flat, oil prices continue to rise (Reuters) Futures for Canada’s main stock index were little changed on Tuesday, even though oil prices rose to their highest level since November after the U.S. tightened sanctions on Iran.

Stocks Mixed as Earnings Roll In; Oil Extends Gain: Markets Wrap (Bloomberg) U.S. equity-index futures were range bound, European stocks slipped and Asian shares nudged higher on Tuesday as many markets reopened after a long weekend and as the results season ramps up. Crude extended recent gains.

Oil hits highest since November as U.S. to tighten Iran sanctions (Reuters) Oil prices hit their highest since November on Tuesday after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran and further tightening global supply.

China complains to U.S. over end to Iran oil sanction waivers (Reuters) China’s Foreign Ministry said on Tuesday it has formally complained to the United States over its decision to end waivers on sanctions on Iranian oil imports, adding another fault line to already complicated Beijing-Washington ties.

Dollar gains with FX volatility holding near five-year lows (Reuters) The dollar held near three-week highs on Tuesday as a drop in market volatility ramped up demand for riskier assets, with higher U.S. bond yields also offering some support.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.622%	2 Year	2.391%
5 Year	1.619%	5 Year	2.386%
10 Year	1.798%	10 Year	2.589%
30 Year	2.104%	30 Year	2.997%

US Economic Data

09:00 AM	FHFA House Price Index MoM, Feb Survey 0.50% Prior 0.60%
10:00 AM	Richmond Fed Manufact. Index, Apr Survey 10 Prior 10
	New Home Sales, Mar Survey 649k Prior 667k
	New Home Sales MoM, Mar Survey -2.70% Prior 4.90%

Canadian Economic Data

08:30 AM

Wholesale Trade Sales MoM, Feb Survey 0.10% 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

News headlines

U.S. Stock Futures Decline in Holiday-Hit Trading: Markets Wrap (Bloomberg) U.S. equity-index futures dropped on Monday while stocks in Asia were mixed as the Easter holiday weekend continued in many countries. Oil jumped on a report America scrapped waivers allowing the purchase of some Iranian crude.

U.S. to Eliminate Iran Oil Waivers After May 2 Expiration (Bloomberg) The Trump administration won’t renew waivers that let countries buy Iranian oil without facing U.S. sanctions, according to four people familiar with the matter, a move that roiled energy markets and risks upsetting major importers such as China and India.

To survive trade battles, China manufacturers deploy every weapon they can (Reuters) Manufacturers in China facing trade barriers are deploying an array of moves to try to keep foreign customers – giving discounts, tapping tax breaks, trimming workforces and, occasionally, shifting production overseas to skirt tariffs.

CANADA STOCKS-TSX futures flat; oil hits 2019 high (Reuters) Futures for Canada’s main stock index were little changed on Monday, even as oil prices hit their highest since November.

PRECIOUS-Gold recovers from 4-month low, tracks oil price rally (Reuters) Gold inched up on Monday, moving away from a near 4-month trough touched in the previous session, drawing support from a drop in equities and a jump in crude oil prices.

Financial market ‘pause party’ makes Fed rate cut less likely (Reuters) Risk-taking has been the rage since the Federal Reserve quit hiking interest rates at the end of last year. U.S. stocks are back near record highs and investors are stockpiling the lowest-grade corporate bonds with only a smidgen of extra compensation for the added risk.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.629%	2 Year	2.385%
5 Year	1.627%	5 Year	2.378%
10 Year	1.789%	10 Year	2.57%
30 Year	2.07%	30 Year	2.976%

US Economic Data

08:30 AM	Chicago Fed Nat Activity Index, Mar Survey -0.10 Actual -0.15 Prior -0.29
10:00 AM	Existing Home Sales, Mar Survey 5.30m Prior 5.51m
	Existing Home Sales MoM, Mar Survey -3.80% Prior 11.8%

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Apr 19 Survey – Prior 55.8

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