Commentaires

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

Market Update

US tsys continuing higher, adding to Wed post FOMC rally, on moderate futures volume (327k TY1), US 10Y 2.51% (-2bps), off the highs after March Phili Fed (13.7 vs 4.8exp). EGBS higher, in catchup mode from yest FOMC.  UK gilt yields 5-8bps lower, BOE left rates on hold as exp saying that rates could move in either direction. GOCs higher, in line with tsys, 10Y 1.635%  a 21 month low – 10s looking very expensive on the curve on a 3 month basis ( 3 stds vs 2s/30s). The BOC auctions  $3.0bln in 2Y bonds , reopening the 1.75% May 21 issue which will take it to $9.0bln outstanding, the May 21/Feb 21 roll -0.1/-0.4. Quebec budget later this aft.

News headlines

Bonds Rally, Dollar Rebounds as Fed Spurs Caution: Markets Wrap (Bloomberg) Government bond yields retreated while U.S. equity futures and European stocks fell on Thursday as investors digested a dovish lurch by policy makers in the world’s largest economy. The dollar rebounded after Wednesday’s loss.

Fed sees no 2019 hikes, plans September end to asset drawdown (BNN) Federal Reserve officials scaled back their projected interest-rate increases this year to zero and said they would end the drawdown of the central bank’s bond holdings in September after holding policy steady on Wednesday.

‘Opportunity missed’: What these analysts hoped to see in the federal budget but didn’t (BNN) The federal budget, largely seen as a pre-election document, introduced measures on Tuesday that targeted a number of different groups. From support for debt-burdened students and worried retirees, to help for first-time homebuyers, the budget was wide-reaching.

Trump says tariffs will stay on until China complies with a deal (BNN) President Donald Trump said Wednesday he’ll keep tariffs on China until he is sure Beijing is complying with any trade deal the two nations reach.

SNC-Lavalin Chief Says Job Losses Possible Amid Canadian Scandal (Bloomberg) The head of the Montreal-based construction giant at the center of a political firestorm warned the company remains undervalued, is vulnerable to a takeover and at risk of shedding jobs in Canada.

PRECIOUS-Gold hits 3-week high as Fed stalls 2019 rate hikes; palladium scales new peak (Reuters) Gold prices rose to a three-week high on Thursday, after the U.S. Federal Reserve abandoned plans to raise interest rates for the year, while a cut in its U.S. growth forecast exacerbated worries of a global economic slowdown.

Oil Holds Near $60 as U.S. Stockpiles Plunge, Saudis Cut Supply (Bloomberg) Oil held near a four-month high after U.S. crude inventories plunged by the most since July, while Saudi Arabia pressed on with export cuts.

PRECIOUS-Gold hits 3-week high as Fed stalls 2019 rate hikes; palladium scales new peak (Reuters) Gold prices rose to a three-week high on Thursday, after the U.S. Federal Reserve abandoned plans to raise interest rates for the year, while a cut in its U.S. growth forecast exacerbated worries of a global economic slowdown.

Overnight markets

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.578%	2 Year	2.384%
5 Year	1.524%	5 Year	2.304%
10 Year	1.642%	10 Year	2.505%
30 Year	1.965%	30 Year	2.957%

US Economic Data

8:30 AM	Philadelphia Fed Business Outlook, Mar Surv 4.8 Actual 13.7 Prior -4.1
	Initial Jobless Claims, Mar 16 Surv 225k Actual 221k Prior 229k Revised 230k
	Continuing Claims, Mar 9 Surv 1770k Actual 1750k Prior 1776k Revised 1777k
9:45 AM	Bloomberg Consumer Comfort, Mar 17 Prior 60.8
	Bloomberg Economic Expectations, Mar Prior 54.5
10:00 AM	Leading Index, Feb Surv 0.1% Prior -0.1%

Canadian Economic Data

8:30 AM

Wholesale Trade Sales MoM, Jan Surv 0.6% Actual 0.6% Prior 0.3%

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