Commentaires matinaux

Market Update

US tsys lower ahead of March nonfarm payrolls, US 10Y 2.535% (+2bps). US equity futures slightly higher (S&P +2.75), crude unch at $62, up for a fifth straight week.  Median estimate is for 177k increase in payrolls after a 20k rise in Feb, with the unemployment rate unch at 3.8% and AHE  +0.3%/3.4% y/y. UK gilts have sold off and the curve is steeper, yields 3-5bps higher after PM May asked the EU to delay Brexit until June 30th. GOCs unch before March Employment – 6k exp after huge 56k increase in Feb, Jan-Feb were the strongest two-month increases to start the year since 1981. The BOC announced details of next week’s two year auction – reopening the May 2021 issue for $3bln ($9bln outstanding) , the current May21/2Y roll -0.3/-0.6. , 2s5s is 1bp inverted.

News headlines

Stocks Edge Higher With Bond Yields on Trade Hopes: Markets Wrap (Bloomberg) Global stocks edged higher while Treasuries slipped following remarks from both China and the U.S. that progress was being made in trade talks. The dollar rose hours before Friday’s report on the American job market.

TSX futures little changed ahead of employment data (Reuters) Stock futures for Canada’s main stock index were flat on Friday, ahead of keenly awaited employment reports from the United States and Canada.

U.S. job growth seen accelerating from 17-month trough (Reuters) U.S. employment growth likely rebounded from a 17-month low in March as milder weather boosted activity in sectors like construction, which could further allay fears of a sharp slowdown in economic growth in the first quarter.

Trump says U.S.-China trade deal may be reached in four weeks (Reuters) U.S. President Donald Trump said on Thursday the United States and China were close to a trade deal that could be announced within four weeks, while warning Beijing that it would be difficult to allow trade to continue without a pact.

Oil in Longest Run of Weekly Gains Since 2017 on Tight Supply (Bloomberg) Oil in New York headed for the longest weekly winning streak since November 2017 as crises from Venezuela to Libya threatened supplies, while optimism over U.S.-China trade talks buoyed the outlook for demand.

Trade optimism supports dollar ahead of U.S. jobs report (Reuters) Optimism for a U.S.-China trade deal helped the dollar hit a three-week high against the yen on Friday, although moves in broader foreign exchange markets were limited as investors saw a lot of headlines but no conclusions out of the trade talks.

Venezuela Blackouts Cut Oil Output by Half During March (Bloomberg) Power failures that plunged Venezuela into darkness for much of March also briefly slashed the country’s crude production by half, according to people familiar with the situation.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.591%	2 Year	2.358%
5 Year	1.582%	5 Year	2.342%
10 Year	1.714%	10 Year	2.537%
30 Year	1.985%	30 Year	2.943%

US Economic Data

8:30 AM	Change in Nonfarm Payrolls, Mar Surv 177k Prior 20k
	Change in Manufact. Payrolls, Mar Surv 10k Prior 4k
	Unemployment Rate, Mar Surv 3.8% Prior 3.8%
	Average Hourly Earnings MoM, Mar Surv 0.3% Prior 0.4%
	Average Hourly Earnings YoY, Mar Surv 3.4% Prior 3.4%

Canadian Economic Data

8:30 AM	Net Change in Employment, Mar Surv 6.0k Prior 55.9k
	Unemployment Rate, Mar Surv 5.8% Prior 5.8%
	Hourly Wage Rate Permanent Employees YoY, Mar Surv 2.2% Prior 2.2%
	Participation Rate, Mar Surv 65.7 Prior 65.8

Disclosure and Disclaimer

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 slightly lower, off the intraday lows on heavy volume in TY futures (500k), little move in equities (S&P fut +2), US 10Y 2.38% (+1bp). US Q4 GDP revised lower to 2.2% from 2.6%, little reaction in tsys so far yet with a full rate cut priced by year end the weakness is arguably priced in. Bund yields unch, 10Y -0.085% , UK gilt yields 3-4bps lower, 10Y gilt/tsy spd 7bps tighter on the week – the Brexit process is in limbo after the UK parliament failed to approve any of the eight Brexit options being considered. Multiple Fed speakers including Quarles and Clarida.

News headlines

Treasuries Steady; Stocks Mixed as Dollar Advances: Markets Wrap (Bloomberg) The global bond rally showed signs of easing Thursday as Treasuries and German bunds stabilized. U.S. equity futures were steady alongside European stocks.

China makes unprecedented proposals on tech, trade talks progress – U.S. officials (Reuters) China has made unprecedented proposals in talks with the United States on a range of issues including forced technology transfer as the two sides work to overcome remaining obstacles to a deal to end their protracted trade war, U.S. officials told Reuters on Wednesday.

TSX futures edge higher amid trade optimism (Reuters) Stock futures pointed to a slightly higher opening for Canada’s main stock index on Thursday as U.S. and China made progress in trade talks, but gains were capped by persisting global growth concerns.

European shares rise on trade hopes, despite Brexit deadlock (Reuters) European shares rose on Thursday as signs of progress in U.S.-China trade talks helped investors look past worries over global growth and Britain’s chaotic effort to leave the European Union.

Oil Declines After Surprise Gain in U.S. Crude Inventories (Bloomberg) Oil fell for a second day after an unexpected jump in U.S. crude stockpiles unnerved a market already anxious about faltering global demand.

China’s canola ban adds to Trudeau’s woes in Huawei feud (BNN) China is ramping up pressure on Justin Trudeau in a feud that already had the Canadian prime minister facing few good options.

Lira liquidity hopes help Turkey dollar bonds recover some ground (Reuters) Turkey’s shorter-dated dollar-denominated sovereign bonds recovered some of their early losses on Thursday, with longer-dated bonds moving into positive territory.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.453%	2 Year	2.204%
5 Year	1.414%	5 Year	2.17%
10 Year	1.517%	10 Year	2.366%
30 Year	1.824%	30 Year	2.813%

US Economic Data

8:30 AM	GDP Annualized QoQ, 4Q T Surv 2.3% Prior 2.6%
	Personal Consumption, 4Q T Surv 2.6% Prior 2.8%
	GDP Price Index, 4Q T Surv 1.8% Prior 1.8%
	Core PCE QoQ, 4Q T Surv 1.7% Prior 1.7%
	Initial Jobless Claims, Mar 23 Surv 220k Prior 221k
	Continuing Claims, Mar 16 Surv 1778k Prior 1750k
9:45 AM	Bloomberg Consumer Comfort, Mar 24 Prior 61.5
10:00 AM	Pending Home Sales MoM, Feb Surv -0.5% Prior 4.6%

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

US tsys higher, yields 3-5bps lower and the tsy curve 2bps steeper, 10Y 2.39% lowest since Dec 2017, S&P futures moving lower since early morning (-3.25).  Core EGBs rallying led by 10Y bunds, 10Y bund auction sold at -0.05%, first negative auction yield since 2016 with the highest bid-cover since May 2018. UK gilts lagging bunds by 2bps, the UK parliament to vote on PM May’s Brexit deal (extending deadline to end of May). ECB president Mario Draghi with further dovish comments, saying the ECB could adjust its forward guidance and delay rate increases if conditions warrant. Fed nominee Stephen Moore, said the central bank should cut rates immediately by 50bps, in an interview with the NYT.  GOCs higher in line with tsys, curve 1bp steeper with the 10Y 1.53% (-4bps), 2Y 1.46% low since Dec 2017. The BOC auctions $2bln in reopened 0.50% Mar 1 2022s at noon with the roll to 2Ys now negative, -0.4bps, in the context of  2s5s  at -4.5bps.

News headlines

Bonds Rally as Europe Stocks, U.S. Futures Decline: Markets Wrap (Bloomberg) Treasuries rallied with German bunds and the yen as investors turned their focus to a worrying economic outlook and a decisive shift toward accommodation by major central banks. Stocks in Europe declined along with U.S. equity futures.

U.S. consumer confidence slumps in March, missing all estimates (BNN) U.S. consumer confidence declined for the fourth time in five months on dimmer assessments of present conditions, suggesting that weak first-quarter growth and slower job gains in February are weighing on attitudes and potentially spending.

Oil Slides From Near $60 Amid Mixed Signs on U.S. Inventories (Bloomberg) Oil slid from near $60 a barrel in New York amid conflicting signals on U.S. crude inventories, while traders continued to weigh OPEC supply cuts and fragile demand.

China’s industrial profits shrink most since late 2011 as economy cools (Reuters) China’s industrial firms posted their worst slump in profits since late 2011 in the first two months of this year, data showed on Wednesday, as increasing strains on the economy in the face of slowing demand at home and abroad took a toll on businesses.

Recession Risks Creep Beyond Yield Curve Into U.S. Economic Data (Bloomberg) As the bond market’s yield curve flashes warning signs of a U.S. recession, some key economic indicators are offering more conflicting signals about the outlook.

Weak euro zone growth could raise stability risks: ECB’s de Guindos (Reuters) Weak euro zone growth is increasing the risk of financial instability as bank profits weaken and sovereign debt sustainability concerns rise, European Central Bank Vice President Luis de Guindos said on Wednesday.

May’s Deal Gains Support Ahead of Votes on Plan B: Brexit Update (Bloomberg) Theresa May’s Brexit deal is finally winning a bit of support from Conservative hardliners, though she may have to promise to step down to get it over the line. Brexiteers’ minds have been focused by the prospect of Parliament taking control of the process and voting to soften — or cancel — the divorce.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.466%	2 Year	2.2%
5 Year	1.419%	5 Year	2.153%
10 Year	1.533%	10 Year	2.379%
30 Year	1.831%	30 Year	2.838%

US Economic Data

7:00 AM	MBA Mortgage Applications, Mar 22 Actual 8.9% Prior 1.6%
8:30 AM	Trade Balance, Jan -$57.0b  Prior -$59.8b
10:00 AM	Current Account Balance, 4Q Surv -$130.0b Prior -$124.8b

Canadian Economic Data

8:30 AM

Int’l Merchandise Trade, Jan Surv -3.55b Prior -4.59b

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