Comments

Market Update

US tsys under pressure, yields 2-2.5bps higher, 10Y 2.57% , moderate volume in TY futures (350k), equities near top of overnight range (S&P fut +10). BOA Q1 eps beat est  $0.70 vs $0.66, with record quarterly earnings $7.3bln. Walmart announced a benchmark (~$1bln) USD 5,7 & 10Y deal.  Core EGBs little changed, UK gilts flat after Feb employment rose 179k close to exp, while EU summit chair Tusk said he “dreams” of the UK remaining in the EU but admits he has few allies who want to reverse Brexit.  GOCs lower in line with tsys, Can/US ~2bps tighter after since yesterday’s weaker BOC outlook survey. March CPI tomorrow, expecting another strong m/m increase (0.7%) with gas prices up 11% last month and strong seasonals. If that is the case the gentle rally in breakevens since year end could gain some traction, particularly short dated RRB 21s & 26s due to higher carry profile.

News headlines

Stocks Gain as Earnings Lift Outlook; Bonds Steady: Markets Wrap (Bloomberg) Stocks advanced globally on Tuesday as investors showed confidence the equity rally will find fresh support from the deluge of corporate earnings due this week. The dollar strengthened while Treasuries were steady.

Futures rise tracking global markets (Reuters) Futures for Canada’s main stock index inched higher on Tuesday, after stock markets around the world gained on reduced volatility.

Trump on China trade spat: ‘We’re going to win either way’ (Reuters) President Donald Trump said on Monday he believed the United States would emerge from its trade dispute with China as a winner, no matter what happened.

Loonie falls as business sentiment softens on slowing economy (BNN) Canada’s recent economic slowdown and global trade tensions are hitting businesses confidence, according to a Bank of Canada survey.

EU says it is ready to launch U.S. trade talks, but without agriculture (Reuters) The European Union is ready to start talks on a trade agreement with the United States and aims to conclude a deal before year-end, European Trade Commissioner Cecilia Malmstrom said on Monday.

China’s policy stimulus may worsen economic distortions: OECD (Reuters) China’s stimulus measures will shore up economic growth this year and next but may undermine the country’s drive to control debt and worsen structural distortions over the medium term, the OECD said in a report on Tuesday.

Canada’s oil heartland heads to polls with carbon taxes at risk (BNN) Voters in the Canadian province of Alberta, home to the world’s third-largest oil reserves, head to the voting booth today in a divisive election that could have wide-ranging implications for the country’s environmental policy and global energy markets.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.612%	2 Year	2.398%
5 Year	1.618%	5 Year	2.384%
10 Year	1.756%	10 Year	2.567%
30 Year	2.059%	30 Year	2.981%

US Economic Data

09:15 AM	Industrial Production MoM, Mar Survey 0.20% Prior 0.10%
	Capacity Utilization, Mar Survey 79.20% Prior 78.20%
10:00 AM	NAHB Housing Market Index, Apr Survey 63 Prior 62

Canadian Economic Data

08:30 AM	Int’l Securities Transactions, Feb Survey — Prior 28.40b
	Manufacturing Sales MoM, Feb Survey -0.10% Prior 1.00%

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

Market Update

Rates drifting around steady to mildly mixed after the bell, long end buying last few minutes. Generally quiet inside range day so far. Equities mildly weaker (SPX -1.0 at 2911.5); US$ index lower (DXY -.158, 96.814). Otherwise quiet ahead next week’s shortened pre-Easter holiday weekend; Fed Blackout kicks off April 20 through May 2. The 2-Yr yield is up 0.6bps at 2.3977%, 5-Yr is down 0.2bps at 2.3786%, 10-Yr is down 0.5bps at 2.5597%, and 30-Yr is down 0.6bps at 2.9705%.

News headlines

Stocks Drift Higher as Earnings Roll In; Oil Dips: Markets Wrap (Bloomberg) U.S. equity futures drifted on Monday while stocks in Europe edged higher as investors turned modestly optimistic toward the next batch of corporate earnings. Treasuries held steady with the dollar.

Oil Retreats After Longest Run of Weekly Gains in Three Years (Bloomberg) Oil retreated in New York after its longest run of weekly gains in three years, as traders and investors awaited more clarity on the strength of the global economy and demand.

Exclusive: U.S. waters down demand China ax subsidies in push for trade deal – sources (Reuters) U.S. negotiators have tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing, according to two sources briefed on discussions, marking a retreat on a core U.S. objective for the trade talks.

EU countries back starting trade talks with United States (Reuters) European Union countries gave final clearance on Monday to start formal trade talks with the United States after months of delay due to French resistance.

China starts review of anti-dumping measures on U.S. distillers grains (Reuters) China’s Ministry of Commerce confirmed it is starting a review on Monday of its anti-dumping tariffs on imports of distillers grains (DDGS) from the United States and said the investigation should be completed in a year.

Futures dip as oil prices fall on supply concerns (Reuters) Futures for Canada’s main stock index edged lower on Monday, as oil prices halted their rally on mixed signals over global supply.

METALS-Copper stays firm ahead of China data, clues to demand prospects (Reuters) Copper prices steadied on Monday, reinforced by a lower dollar and healthy economic numbers from China ahead of a barrage of growth data later this week from the top consumer.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.645%	2 Year	2.402%
5 Year	1.66%	5 Year	2.384%
10 Year	1.793%	10 Year	2.565%
30 Year	2.072%	30 Year	2.977%

US Economic Data

08:30 AM	Empire Manufacturing, Apr Survey 8.0 Actual 10.1 Prior 3.7
04:00 PM	Net Long-term TIC Flows, Feb Survey — Prior -$7.2b
	Total Net TIC Flows, Feb Survey — Prior -$143.7b

Canadian Economic Data

09:00 AM	Existing Home Sales MoM, Mar Survey 2.00% Prior -9.10%
10:30 AM	BoC Senior Loan Officer Survey, 1Q Survey — Prior -16.0
	BoC Business Outlook Future Sales, 1Q Survey — Prior -1.0

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 weaker on strong ‘risk on’ tone after better than expected China data (exports surged 14.2% in March vs 6.5% exp, +21% in Yuan terms), 10Y 2.54% (+4.7bps), S&P futures +16, crude 64.40 (+0.82), USD index reversing Thursday’s gains, -0.305 96.87. JPM beat Q1 estimates by a wide margin – $2.65 vs $2.35 with revenues rising to a record $29.9bln, while its NIM jumped to the highest in seven yrs at 2.57%. Wells Fargo eps $1.20 vs $1.09, shares up 0.67% pre-mkt.  GOCs weaker, curve another 2bps steeper led by the 10Y, which saw some fairly severe selling yesterday afternoon on the back of 2 blocks of 1500 contracts in CGBs.  Provi spreads ~2bps tighter, Ont 28s 70.5. Ontario 2019 budget neutral for spds, borrowings to decline from $36bln from $39.6bln, with balanced budget forecast by 2024.

News headlines

China March exports rebound to five-month high but imports fall more than expected (Reuters) China’s exports rebounded in March but imports shrank for a fourth straight month and at a sharper pace, painting a mixed picture of the economy as trade talks with the United States reach their endgame.

Stocks Rise, Bonds Drop on China Data; Oil Climbs: Markets Wrap (Bloomberg) Stocks turned higher on Friday and Treasuries slipped with the dollar as credit growth in China and the first major U.S. bank earnings both beat expectations.

TSX futures lifted by rising oil (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Friday, as oil prices rose following supply cuts from Venezuela, Libya and Iran.

U.S. EPA to revise proposed freeze of vehicle fuel economy rules (Reuters) The head of the U.S. Environmental Protection Agency said on Thursday the agency would revise its proposed freeze of vehicle fuel economy standards before unveiling its final regulation in the coming months.

Oil Heads for Sixth Weekly Gain Amid Falling OPEC Production (Bloomberg) Oil headed for a sixth weekly increase as falling OPEC production tightened global crude markets, offsetting concerns that slower economic growth will weaken demand.

Futures rise as JPMorgan kicks off earnings season on strong note (Reuters) U.S. stock index futures rose on Friday after JPMorgan kicked off first-quarter earnings season on a strong note, while signs of stabilization in China’s economy helped ease global growth concerns.

Ontario charts five-year path back to balance while avoiding austerity (BNN) Ontario is charting a path back to balance but the Ford government’s inaugural budget will keep voters waiting until after the next election before getting the books in the black.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.624%	2 Year	2.391%
5 Year	1.636%	5 Year	2.363%
10 Year	1.769%	10 Year	2.544%
30 Year	2.054%	30 Year	2.961%

US Economic Data

8:30 AM	Teranet/National Bank HPI MoM, Mar Actual -0.3% Prior -0.4%
	Import Price Index MoM, Mar Surv 0.4% Actual 0.6% Prior 0.6%
	Import Price Index YoY, Mar Surv -0.6% Actual 0.0% Prior -1.3%
10:00 AM	U. of Mich. Sentiment, Apr P Surv 98.2 Prior 98.4

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