Commentaires matinaux

Market Update

US tsys trading lower reversing yesterday’s gains, 10Y 2.44% (+4bps) with the long end outperforming. equity futures higher (S&P +14.75, Nasdaq +41). Housing Starts fell the most in eight months in Feb -8.7% vs -1.6% exp . The US auctions $40bln in 2Y notes at 1:00PM, the WI at 2.27% is below the 2Y auction level since Feb 2018 and 20bps richer than last month.  Mars Inc to price eight-part USDF benchmark this morn, CIBC issuing 5Y USD bail-in bonds @~105bps (GOCs + 126) . Volatility is back in the US treasury mkt based on the ‘MOVE’ index- which has surged to the highest level since 2016 over the last two days.  GOCs lower, outperforming tsys by ~bp across the curve, provis 1-1.5bps tighter.

News headlines

Treasury Yields Rise as U.S. Stock Futures Advance: Markets Wrap (Bloomberg) Treasuries fell and U.S. stock index futures climbed on Tuesday as investor fears triggered by signals from the American bond market showed signs of easing. The dollar was steady and European shares advanced.

Recession obsession keeps the mood subdued (Reuters) Calm returned to global markets on Tuesday as a steadier day for Europe and Asia’s bourses and a tick higher in benchmark bond yields helped ease nerves after a jarring few days dominated by recession worries.

Macron calls on China and EU to strengthen multilateralism (Reuters) French President Emmanuel Macron on Tuesday said competition between the European Union and China must not lead to a breakdown in world trade systems or political isolationism, as his Chinese counterpart promised to work side-by-side with Europe.

Fed could build firepower for new Operation Twist: Harker (Reuters) The U.S. Federal Reserve intends to shorten the duration of bonds it has on its balance sheet to build some firepower in case it needs to use it as a stimulus tool once again, Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday.

TSX futures rise on higher oil prices (Reuters) Stock futures pointed to a higher opening for Canada’s main stock index on Tuesday, as oil prices rose with OPEC-led supply cuts and expectations of lower U.S. inventories countering concerns about global economic growth.

Canada’s inverted yield curve signals holding pattern for Poloz (BNN) Canada has joined the U.S. in the inverted yield curve club, signaling a growing risk of recession that may keep Stephen Poloz on hold for his final 14 months as head of Canada’s central bank.

SNC Dealt Another Blow With Copper Mine Project Cancellation (Bloomberg) SNC-Lavalin Group Inc., the embattled engineering firm at the heart of Canada’s biggest political crisis in years, has been dealt another blow in Chile.

Oil Rises as Growth Angst Eases, Venezuela Fears Mount (Bloomberg) Oil rebounded along with global markets as pessimism over the global growth outlook eased a little, while rising tension in Venezuela revived fears of supply losses.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.514%	2 Year	2.293%
5 Year	1.477%	5 Year	2.235%
10 Year	1.59%	10 Year	2.446%
30 Year	1.883%	30 Year	2.896%

US Economic Data

8:30 AM	Housing Starts, Feb Surv 1210k Prior 1230k
	Housing Starts MoM, Feb Surv -1.6% Prior 18.6%
	Building Permits, Feb Surv  1305k Prior 1345k
9:00 AM	FHFA House Price Index MoM, Jan Surv 0.4% Prior 0.3%
	S&P CoreLogic CS 20-City YoY NSA, Jan Surv 3.80% Prior 4.18%
	S&P CoreLogic CS 20-City NSA Index, Jan Surv 212.79 Prior 212.96
10:00 AM	Richmond Fed Manufact. Index, Mar Surv 10 Prior 16
	Conf. Board Consumer Confidence, Mar Surv 132.5 Prior 131.4

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

Market Update

US tsys trading weaker, yields 1-3bps higher, US 10Y 2.465% (+2.5bps). US equity futures slightly lower (S&P -0.1%), crude 0.40% lower 58.79.  Phili Fed Harker said this morn he sees one rate hike this year ‘at most’, while Fed Evans said the Fed may have to put increases on hold or even cut rates should activity soften further or inflation expectations run too low.  Core Euro bonds lower, bund yields ~1bp higher, German business confidence coming in better than exp in March (99.6 vs 98.5). Gilts underperforming bunds, PM May under pressure to quiet under a non deal Brexit scenario. GOCs consolidating after Friday’s  7-8bp rally, OIS mkts now pricing in a rate cut by next year.

News headlines

Trump Claims Vindication as Mueller Finds No Russia Collusion (Bloomberg) Attorney General William Barr handed Donald Trump the biggest political victory of his presidency with an assessment that there was no collusion with Russia during the 2016 campaign and that there wasn’t enough evidence to find he obstructed justice.

U.S. Futures, Europe Stocks Trim Drop; Bonds Slip: Markets Wrap (Bloomberg) U.S. equity futures and stocks in Europe stabilized on Monday, as a measure of calm returned to markets following Friday’s selloff. Treasuries and European sovereign bonds fell.

Oil Steady After Biggest Loss in Three Weeks Amid Economy Fears (Bloomberg) Oil steadied in New York after its biggest loss in three weeks, yet concerns lingered that a slowdown in global economic growth will erode fuel consumption.

TSX futures little changed amid global growth fears (Reuters) Stock futures for Canada’s main stock index were little changed on Monday, as fears mount over a global economic slowdown.

Seller’s market seen aiding Illinois and Chicago bond issues (Reuters) Financial uncertainties swirling around Illinois and Chicago may not deter bond buyers when the two fiscally shaky governments sell more than $1.1 billion of debt this week.

Flattened yield curve reason to be nervous, but U.S. economy solid: Fed’s Evans (Reuters) Chicago Federal Reserve Bank President Charles Evans said on Monday it was understandable for markets to be nervous when the yield curve flattened, though he was still confident about the U.S. economic growth outlook.

Positive German data tempers equity selloff, lifts bond yields (Reuters) World stocks hit a 12-day trough on Monday as fears for economic growth sent investors dashing for safe-haven assets, but the selloff lost some momentum after better-than-expected data from Germany.

Trump push for China trade reform draws wide support at home, abroad (Reuters) U.S. President Donald Trump’s blunt-force use of tariffs in pursuing his “America First” trade agenda has angered many, from company executives to allied governments and members of both parties of Congress.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.536%	2 Year	2.333%
5 Year	1.495%	5 Year	2.265%
10 Year	1.611%	10 Year	2.466%
30 Year	1.905%	30 Year	2.903%

US Economic Data

8:30 AM	Chicago Fed Nat Activity Index, Feb Surv -0.38 Actual -0.29 Prior -0.43
10:30 AM	Dallas Fed Manf. Activity, Mar Surv 8.5 Prior 13.1

Canadian Economic Data

10:00 AM

Bloomberg Nanos Confidence, Mar 22 Prior 55.2

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 significantly higher, yields 4-6bps lower with the 10Y below 2.50% for the first time since Jan 2018, now 2.475 (-6bps). Weak European PMIs driving 10Y bund below 0% for the first time since 2016.  German Manuf PMI fell to 44.7 in March vs 48 exp, the third consecutive month of contraction, new orders falling to the lowest since 2009. UK gilts lagging the rally in tsys, bunds – the EU has agreed to delay Brexit by two weeks from next Friday.  GOC yields 2-6bps lower , curve flatter led by 10s, 10Y 1.60%, the GOC curve trading below cash thru 2029. Two corp deals yest – $750mln IPL 29s @ ~522 & $500mln Bruce Power @275 – the IPLs gapping in ~20bps on the break

News headlines

Stocks Drop, Bonds Climb After German Data Shocker: Markets Wrap (Bloomberg) European stocks fell with U.S. equity futures and Treasuries rose after miserable data from the German manufacturing sector renewed worries about global growth on Friday. The yield on Germany’s 10-year bonds — Europe’s benchmark — tumbled below zero.

U.S. corporate breakups could be catalyst to change Dow index (Reuters) Shake-ups come infrequently for the Dow Jones Industrial Average, but some degree of change may be in the works for the stock index as two of its 30 constituents prepare to transform from large conglomerates into smaller companies.

German manufacturing contracts for third month in a row: PMI (Reuters) German manufacturing contracted further in March, a survey showed on Friday, compounding fears that unresolved trade disputes are exacerbating a slowdown in Europe’s biggest economy.

Skittish investors pull more than $20 billion from stocks, rush into bonds: BAML (Reuters) Global equity funds saw massive outflows this week, a sharp reversal from last week’s inflows as pessimism over economic growth gripped investors once again, driving them instead to search for yield in credit and buy safer assets like bonds.

China, Italy looking to strengthen trade, infrastructure ties-Xi (Reuters) Italy and China want to revive the spirit of the ancient Silk Road by deepening their trade and investment ties, Chinese President Xi Jinping said on Friday during a trip to Rome that has raised eyebrows in Washington.

TSX futures fall on lower crude prices (Reuters) Futures for Canada’s main stock index traded lower on Friday, as oil prices dropped on concerns over a slowdown in global economic growth.

Trump: China trade deal likely; carmakers can avoid tariffs with U.S. plants (Reuters) U.S. President Donald Trump said trade negotiations with China were progressing and a final agreement “will probably happen,” adding that his call for tariffs to remain on Chinese imported good for some time did not mean talks were in trouble.

Fitch warns Canada’s debt close to level incompatible with ‘AAA’ status (BNN) A major credit rating agency is warning Ottawa that sustained deficits will make Canada more vulnerable to an economic downturn.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.573%	2 Year	2.369%
5 Year	1.509%	5 Year	2.286%
10 Year	1.615%	10 Year	2.478%
30 Year	1.924%	30 Year	2.914%

US Economic Data

9:45 AM	Markit US Manufacturing PMI, Mar P Surv 53.5 Prior 53.0
	Markit US Services PMI, Mar P Surv 55.5 Prior 56
	Markit US Composite PMI, Mar P Prior 55.5
10:00 AM	Wholesale Inventories MoM, Jan Surv 0.1%  Prior 1.1%
	Existing Home Sales, Feb Surv 5.10m Prior 4.94m
	Existing Home Sales MoM, Feb Surv 3.2% Prior -1.2%
2:00 PM	Monthly Budget Statement, Feb Surv -$227.0b Prior -$215.2b

Canadian Economic Data

8:30 AM	Retail Sales MoM, Jan Surv 0.4% Actual -0.3% Prior -0.1%
	Retail Sales Ex Auto MoM, Jan Surv 0.1% Actual 0.1% Prior -0.5%
	CPI NSA MoM, Feb Surv 0.6% Actual 0.7% Prior 0.1%
	CPI YoY, Feb Surv 1.4% Actual 1.5% Prior 1.4%

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