Comments

Market Update

Tsys slightly higher on below avg volume in TY futures, 10Y 2.62% Feb Import Price/ claims data. .  Core EGBs weaker in wake of yesterday’s Brexit vote, UK 10Y gilt 2.5bps higher @ 1.22%.  German bunds lagging the decline in gilts , the IFO Institute downgraded German growth forecast to 0.6% for this year from 1.1%. US equities reversing earlier losses after Trump – Xi meeting pushed back to April.  GOCs higher, in line with tsys, CMB 5Y pricing expected this morn , June 24 36.5/36

News headlines

U.S. Stock Futures Stall on Trade Meeting Delay: Markets Wrap (Bloomberg) U.S. equity futures fluctuated on Thursday as America and China were said to push back a key meeting on trade. European stocks remained higher while the pound fell as the Brexit saga rumbled on.

Brexit heads for delay as May battles to revive her dying deal (BNN) The U.K. is on course to delay Brexit and open the door to a radical re-write of the terms of its divorce from the European Union after recoiling from an economically disastrous no-deal split.

Federal budget expected to have more wiggle room, even with weaker outlook (BNN) The improved economy is expected to give the Trudeau government more fiscal room than anticipated in next week’s pre-election budget — but a wobbly economic finish to 2018 means conditions could look much different as the October vote approaches.

TSX futures flat as investors focus on U.S.-China trade talks (Reuters) Futures on Canada’s main stock index traded flat on Thursday, as uncertainties clouded U.S.-China trade talks, weighing on oil prices.

China industrial output growth falls to 17-year low, more support steps expected (Reuters) Growth in China’s industrial output fell to a 17-year low in the first two months of the year and the jobless rate rose, pointing to further weakness in the world’s second-biggest economy that is likely to trigger more support measures from Beijing.

Trump says he is in no rush to complete China trade deal (Reuters) U.S. President Donald Trump said on Wednesday he was in no rush to complete a trade pact with China and insisted that any deal include protection for intellectual property, a major sticking point between the two sides during months of negotiations.

Trump says he looks forward to big trade deal with UK (Reuters) U.S. President Donald Trump on Thursday said he anticipated a “large scale” trade agreement with the United Kingdom, as the British government grapples with its Brexit deal with Europe and a possible delay.

Oil Erases Gains After U.S., China Said to Delay Trade Agreement (Bloomberg) Oil erased gains after a U.S.-China meeting to end the nations’ trade war was said to have been pushed back.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.673%	2 Year	2.465%
5 Year	1.663%	5 Year	2.432%
10 Year	1.766%	10 Year	2.627%
30 Year	2.046%	30 Year	3.018%

US Economic Data

8:30 AM	Import Price Index MoM, Feb 0.3% Actual 0.6% Prior -0.5%
	Import Price Index YoY, Feb -1.5% Actual -1.3% Prior -1.7%
	Initial Jobless Claims, Mar 9 Surv 225k Acutal 229k Prior 223k
	Continuing Claims, Mar 2 Surv 1763k Actual 1776k Prior 1755k
9:45 AM	Bloomberg Consumer Comfort, Mar 10 Prior 62.1
10:00 AM	New Home Sales MoM, Jan 0.2% Prior 3.7%
	New Home Sales, Jan 622k Prior 621k

Canadian Economic Data

8:30 AM	New Housing Price Index MoM, Jan Surv 0.0% Actual -0.1% Prior 0.0%
	New Housing Price Index YoY, Jan Surv 0.0% -0.1% Prior 0.0%

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

Tsys weaker, near bottom of overnight range on weak volume, 10Y 2.62% (+2bps). European equities slightly higher, S&P futures +8, crude higher for a 3rd day 57.40 (+1.0%) after OPEC pledge to stick to cuts and API data showing a surprise drop in crude inventories last week.  Core Euro bonds lower, gilt yields 1bps higher ahead of Brexit vote this aft.  US data includes Feb PPI, Jan durables and $16bln 30Y auction. In Canada, focus on 5Y CMB – June 15 2024 reopening (37/36.5).

News headlines

Equity markets stymied by signs of slowdown, Brexit chaos (Reuters) World shares slipped on Wednesday after two days of gains amid mounting concern over world growth and trade, though the British pound rallied half a percent on optimism that lawmakers were set to rule out a no-deal Brexit.

Brexit crisis deepens as British lawmakers to vote on no-deal exit (Reuters) Britain’s parliament will vote on Wednesday on whether to leave the European Union in 16 days without an agreement as the government said it would eliminate import tariffs on a wide range of goods in a no-deal Brexit scenario.

European shares up on hopes Britain will reject no-deal Brexit (Reuters) European shares gradually edged up in morning trading on Wednesday on expectations that British lawmakers would vote to reject a disorderly no-deal Brexit.

Pompeo calls on oil industry to support U.S. foreign policy agenda (Reuters) U.S. Secretary of State Mike Pompeo urged the oil industry on Tuesday to work with the Trump administration to promote U.S. foreign policy interests, especially in Asia and in Europe, and to punish what he called “bad actors” on the world stage.

Canada, U.S. refuse to join at least 40 countries in grounding Boeing 737 Max 8; Sunwing suspends four planes on its own (GlobeandMail) Canada has not yet grounded the Boeing 737 Max plane despite at least 40 countries across Europe and Asia banning the jet after two deadly crashes in five months.

Oil Extends Gains on OPEC+ Cuts and Signs of U.S. Supply Drop (Bloomberg) Crude rose for a third day after an industry report showed an unexpected drop in U.S. stockpiles just as planned cuts and disruptions to OPEC output are tightening supply.

Gold hits 2-week high as investors seek refuge from Brexit chaos (Reuters) Gold rose to a near two-week peak on Wednesday, holding above the key $1,300 mark as uncertainty over Britain’s exit from the European Union drove investors to safe haven assets.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.659%	2 Year	2.465%
5 Year	1.651%	5 Year	2.429%
10 Year	1.752%	10 Year	2.623%
30 Year	2.039%	30 Year	3.014%

US Economic Data

7:00 AM	MBA Mortgage Applications, Mar 8 Actual 2.3% Prior -2.5%
8:30 AM	PPI Final Demand MoM, Feb Surv 0.2% Prior -0.1%
	PPI Ex Food and Energy MoM, Feb Surv 0.2% Prior 0.3%
	PPI Final Demand YoY, Feb Surv 1.9% Prior 2.0%
	PPI Ex Food and Energy YoY, Feb Surv 2.6% Prior 2.6%
	Durable Goods Orders, Jan P Surv -0.4% Prior 1.2%
	Durables Ex Transportation, Jan P 0.1% Prior 0.1%
	Cap Goods Orders Nondef Ex Air, Jan P Surv 0.2% Prior -1.0%
10:00 AM	Construction Spending MoM, Jan Surv 0.5% Prior -0.6%

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 trading slightly lower, 10y 2.65 (+1bp) , close to top of o/n range , rallying with bunds/gilts  on comments from UK Attorney General that legal risk to Irish backstop remains unchanged – ahead of key vote on Brexit later today. Feb CPI and $24bln 10Y note auction the focus for US tsys today. CPI expected to show another 0.2% rise in the core, remaining at 2.2% y/y. GOCs lower, in line with tsys, Can/US another 2bps tighter yest, 81bps thru in the 5Y, narrowest since June 2017 right before the BOC embarked on its 125bp rate tightening campaign. CMB 5Y reopening scheduled for Wed (pricing Thurs) – we mentioned in our Provi comment last week that 5Y CMBs look attractive on recent cheapening, and vs Ontarios. Please let us know if you have interest.

News headlines

Futures slightly higher ahead of inflation data (Reuters) U.S. stock index futures inched higher on Tuesday, taking cues from global stocks which rose after last-minute tweaks to Britain’s deal to leave the European Union that eased some fears of a no-deal Brexit, and as investors waited for inflation data.

‘Absurd’ to say Trump unreliable trade negotiator with China: White House (Reuters) The White House said on Monday it was “absurd” to suggest that President Donald Trump was an unreliable negotiator as China reportedly balks at a summit with President Xi Jinping over concerns Trump would walk away from a trade deal.

Rate cut coming with Canada ‘one notch’ from recession: Rosenberg (BNN) The next move from the Bank of Canada will be to cut to interest rates, according to David Rosenberg, who says the economy is just “one notch away” from a recession.

CANADA STOCKS-TSX futures up as oil prices rise (Reuters) Futures pointed to a higher opening for Canada’s main stock index on Tuesday, tracking gains in oil prices.

OECD troubled by allegations Canada meddled in SNC-Lavalin case (Reuters) A major intergovernmental economic group expressed its concern on Monday over allegations the Canadian government tried to interfere in a criminal case against a major construction firm and reminded Ottawa of its promise to respect the independence of prosecutors.

Japan firms wary of wage hike as economy wobbles amid trade war, global slowdown (Reuters) Big Japanese firms are set to offer smaller pay increases this year at annual wage talks on Wednesday as the economy sputters, tempering hopes that domestic consumption will offset external risks to growth.

Pound Drops Before Brexit Vote, Stock Rally Fades: Markets Wrap (Bloomberg) U.S. equity futures edged lower, European stocks turned negative and the pound tumbled after a legal ruling called into question the likelihood of a last-minute breakthrough on Brexit. Treasuries fell and the dollar was steady.

Oil Rises on Tighter Venezuela, Saudi Supplies (Bloomberg) Oil rose to the highest in more than a week after Saudi Arabia was said to plan extending deep supply curbs and a nationwide blackout sparked a production collapse in Venezuela.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.661%	2 Year	2.483%
5 Year	1.648%	5 Year	2.451%
10 Year	1.758%	10 Year	2.648%
30 Year	2.054%	30 Year	3.038%

US Economic Data

6:00 AM	NFIB Small Business Optimism, Feb  Surv 102.5 Actual 101.7 Prior 101.2
8:30 AM	CPI MoM, Feb Surv 0.2% Prior 0.0%
	CPI Ex Food and Energy MoM, Feb Surv 0.2% Prior 0.2%
	CPI YoY, Feb Surv 1.6% Prior 1.6%
	CPI Ex Food and Energy YoY, Feb Surv 2.2% Prior 2.2%
	CPI Core Index SA, Feb Surv 261.193 Prior 260.701
	CPI Index NSA, Feb Surv 252.837 Prior 251.712

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