Commentaires

Market Update

US tsys rallying hard, 10Y below 2.50% (2.485% -4bps) on renewed US/China trade threats after Trump tweets, heavy volume in TY futures (~600k),  S&P futures  down 1.6%, 1900, off the lows of the session. Light data week with focus on April CPI Thursday, with the US auctions $84bln in 3, 10 & 30Y bonds.  Core Euro bonds opened strong, but yields have pushed higher, 10Y bund -1.5bps, 10Y gilt unch. GOCs higher, lagging the rally in tsys by 2bps in 2s and 5s, 0.5bps in 10s.  BOC Governor Poloz speaks in Montreal at 1:45PM on the mortgage market.

News headlines

Stocks Tumble as Trump’s Trade Threat Reverberates: Markets Wrap (Bloomberg) Equities slumped globally on Monday and Treasuries rallied with other haven assets after President Donald Trump’s threat to increase tariffs on Chinese imports called into question the chances of a resolution to the trade war. The yen rose while crude oil declined.

Oil Falls to Five-Week Low After Trump Jeopardizes Trade Talks (Bloomberg) Oil tumbled toward $60 a barrel as President Donald Trump threw trade talks between the world’s two largest economies into disarray with a threat to raise tariffs on Chinese imports, roiling global markets.

China trade team still preparing to go for talks after Trump cranks up pressure (Reuters) China said on Monday that a delegation is still preparing to go to the United States for trade talks, after U.S. President Donald Trump dramatically increased pressure on Beijing to reach a deal, saying he would hike tariffs on Chinese goods this week.

China gives modest boost to economy with RRR cut amid renewed trade tensions (Reuters) China’s central bank said on Monday it will cut reserve requirement ratios (RRRs) to release about 280 billion yuan ($41 billion) for some small and medium-sized banks, in a targeted move to help companies struggling amid an economic slowdown.

TSX futures fall after Trump vows China tariff hike (Reuters) Futures for Canada’s main stock index fell on Monday after U.S. President Donald Trump threatened to raise tariffs on China, triggering a global rout in risky assets.

Toronto home sales surge in April, climb near 17 per cent from last year’s sluggish level (GlobeandMail) Toronto home sales roared ahead in April, climbing almost 17 per cent from last year’s sluggish sales level as detached houses saw a sales leap. The Toronto Real Estate Board said 9,042 homes sold in the Greater Toronto Area last month, a 16.8-per-cent jump from April last year when sales were weak after the implementation of a new mortgage stress test. Sales rose 11.3 per cent on a month-over-month basis from March, based on TREB’s preliminary seasonal adjustment.

Strong Dollar Confronts Clashing Signs (FT) The ICE Dollar Index, which measures the dollar against a basket of six other currencies, stands just below its highest level since May 2017. The measure is up more than 5% over the last 12 months, boosted by comparatively high U.S. interest rates and expectations the U.S. will outperform other economies. Higher rates make the greenback more attractive to investors seeking yield. Determining the dollar’s path is important for companies and investors, as the currency’s movements ripple throughout the world and affect everything from corporate profits to commodity prices.

One Word Grips the Bond Market Before Crucial Inflation Update (Bloomberg) Bond traders will have one word on their minds as they gear up for the latest readings on inflation: “transitory.” That’s how Federal Reserve Chairman Jerome Powell characterized the factors behind muted price pressures after last week’s policy meeting, where officials kept interest rates unchanged. Markets whipsawed on his comments, with benchmark 10-year Treasury yields bouncing off their lowest levels in a month.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.62%	2 Year	2.286%
5 Year	1.588%	5 Year	2.27%
10 Year	1.724%	10 Year	2.48%
30 Year	1.972%	30 Year	2.886%

US Economic Data

There is no Canadian economic data for today.

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, May 3 Surv – 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

Market Update

US tsys trading lower before April Nonfarm payrolls & unemp rate, 10Y 2.56% (+2bps).  Core EGBs weaker after Eurozone core inflation rose 0.4% or 1.2% y/y last month, the strongest increase since Oct (0.2% exp, 0.8% y/y in March).  Payrolls expected to have risen 190k in April from 196k in March, Initial claims hit record lows during the survey weak which supports a stronger number. Hourly earnings are also forecast to remain near a cycle high 3.3%.  US equity futures higher (S&P + 10), tesla up 1.3% pre-mkt on larger than exp capital raise. GOCs weaker in line with tsys, , GOC 5s30s curve 6bps flatter wk/wk, most of the move occurring Wed post FOMC.   Provis unch, 10Y Ontario from yest @ 84 was slow, still rumours of Qc 10s or longs.

News headlines

TSX futures edge higher ahead of U.S. jobs data (Reuters) Futures for Canada’s main stock index were higher on Friday, ahead of the closely watched U.S. jobs data.

Stocks Advance, Treasuries Dip Before U.S. Jobs: Markets Wrap (Bloomberg) U.S. equity futures and European stocks gained as bright spots appeared in corporate earnings ahead of the latest American jobs data. Treasuries slipped, while the dollar edged higher.

Strong U.S. job growth expected in April; wages seen moderate (Reuters) U.S. employers likely maintained a strong pace of hiring in April while steadily increasing wages for workers, pointing to solid economic growth and moderate inflation pressures.

Wall Street Weekahead: Record-breaking rally leaving energy stocks behind (Reuters) The stock market surge since the start of the year that has sent the benchmark S&P 500 index up to new record highs is leaving behind one sector that typically outperforms in an expanding economy: energy.

Moore, under fire, withdraws from bid for Fed post (Reuters) Economic commentator Stephen Moore has withdrawn from consideration for a seat on the U.S. Federal Reserve Board after weeks of criticism about his political partisanship, shifting views on interest rate policy, and sexist comments about women.

Gold eyes worst week since end-March ahead of U.S. jobs data (Reuters) Gold was steady on Friday as the market awaited U.S. non-farm payrolls data but was headed for its biggest weekly decline since the end of March, as the dollar gained after the U.S. central bank doused expectations of a near-term rate cut.

U.S. Jobs Report May See Boost From Temporary Hiring for Census (Bloomberg) Temporary federal government hiring for the U.S. Census Bureau’s 2020 count may give nonfarm payrolls a boost starting with the April jobs report due Friday, economists say.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.634%	2 Year	2.357%
5 Year	1.627%	5 Year	2.364%
10 Year	1.782%	10 Year	2.559%
30 Year	2.02%	30 Year	2.942%

US Economic Data

08:30 AM	Change in Nonfarm Payrolls, Apr Survey 190k Prior 196k
	Change in Private Payrolls, Apr Survey 188k Prior 182k
	Change in Manufact. Payrolls, Apr Survey 10k Prior -6k
	Unemployment Rate, Apr Survey 3.80% Prior 3.80%
	Average Hourly Earnings MoM, Apr Survey 0.30% Prior 0.10%
	Average Hourly Earnings YoY, Apr Survey 3.30% Prior 3.20%
	Average Weekly Hours All Employees, Apr Survey 34.5 Prior 34.5
	Underemployment Rate, Apr Survey — Prior 7.30%
	Wholesale Inventories MoM, Mar P Survey 0.20% Prior 0.20%
09:45 AM	Markit US Services PMI, Apr F Survey 52.9 Prior 52.9
	Markit US Composite PMI, Apr F Survey — Prior 52.8
10:00 AM	ISM Non-Manufacturing Index, Apr Survey 57.0 Prior 56.1

Canadian Economic Data

There is no Canadian economic data for today.

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

Tsys lower, US 10Y 2.515% (+1.5bps), on above avg volume in TY futures (370k), extending weakness from yesterday’s post FOMC press conference where Powell described tepid inflation readings as ‘transitory’.  US equity futures slightly higher, crude -1.6% at 62.60 after EIA inventory data showed an increase of 5.5mln barrels for the third week of April. EGBs mixed, German 10Y bunds unch, UK gilts giving up earlier gains from BOE 9-0 decision to leave rates unchanged, Carney saying rate hikes will be needed than the market expects while anticipating a smooth Brexit transition.  GOCs lower in line with tsys, 10Y 1.72%.

News headlines

Stocks Mixed as Focus Turns to Earnings and Trade: Markets Wrap (Bloomberg) Stocks were mixed on Thursday as investors switched their focus from monetary policy back to company earnings and the outlook for global trade. Treasuries retreated.

Oil Extends Loss as Rising U.S. Inventories Counter Supply Risks (Bloomberg) Oil declined for a second day, trading near $63 a barrel in New York, as a massive surge in U.S. crude stockpiles allayed worries about supply disruptions around the world.

Auto sales dip 3.5% in April as downward trend continues (BNN) DesRosiers Automotive Consultants Inc. says light vehicle sales fell an estimated 3.5 per cent in April from a year earlier as a downward trend in Canadian auto sales continued.

Factories on the mend in April but still struggling (Reuters) Global factory activity recovered a little last month but still appeared to be in the doldrums as demand remained weak and trade protectionism concerns prominent, while stimulus measures had yet to fully kick in.

Bank of England ups growth view, Brexit keeps rate rise on ice (Reuters) The Bank of England lifted its growth forecasts on Thursday but warned Brexit continued to cloud the outlook for Britain’s economy and said there was little immediate risk from waiting for a clearer view before raising interest rates.

Turkey’s Erdogan says determined to lower interest rates to targeted levels (Reuters) President Tayyip Erdogan said on Thursday he was determined to lower interest rates to targeted levels and described recent comments on falling central bank forex reserves as aimed at creating negative sentiment towards Turkey.

U.S. Fed holds key rate steady, reiterates patience on future path (BNN) Federal Reserve Chairman Jerome Powell said U.S. inflation is possibly being dragged down by “transitory” forces and there is no bias to either tighten or ease monetary policy.

Alberta enacts law that could cut energy flows to British Columbia (Reuters) The new Alberta government has enacted a law enabling it to restrict the flow of oil and gas to neighboring British Columbia, raising the stakes in a dispute between Canada’s westernmost provinces over the Trans Mountain pipeline.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.602%	2 Year	2.331%
5 Year	1.579%	5 Year	2.323%
10 Year	1.73%	10 Year	2.523%
30 Year	1.978%	30 Year	2.916%

US Economic Data

08:30 AM	Initial Jobless Claims, Apr 27 Survey 215k Prior 230k
	Continuing Claims, Apr 20 Survey 1660k Prior 1655k
	Nonfarm Productivity, 1Q P Survey 2.2% Prior 1.9%
09:45 AM	Bloomberg Consumer Comfort, Apr 28 Survey — Prior 60.8
10:00 AM	Factory Orders, Mar Survey 1.50% Prior -0.50%
	Durable Goods Orders, Mar F Survey — Prior 2.70%
	Durables Ex Transportation, Mar F Survey — Prior 0.40%
	Cap Goods Orders Nondef Ex Air, Mar F Survey — Prior 1.30%
	Cap Goods Ship Nondef Ex Air, Mar F Survey — Prior -0.20%

Canadian Economic Data

There is no Canadian economic data for today.

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