Canadian Ivey PMI Actual 43.2, Expected 46.7, Previous 45.2

Release Explanation: The Ivey PMI measures month to month changes in the business activity of economic components, by a panel of purchasing managers from across Canada. The 175 participants of this survey have been carefully selected geographically and by sector of activity to match the Canadian economy as a whole. Panel members indicate an increase or decrease in purchases, employment, inventories, supplier deliveries and prices paid and charged.

“Increases or decreases in purchases, employment, inventories, supplier deliveries and prices will impact the economy throughout the spectrum of data” said Trade Team Members. “As the PMI figures move higher or lower, it indicates an increase or decrease in economic growth. These numbers confirmed that a trend lower is in place, with the economy still showing contraction by being under the neutral 50 area, and easily holding in a contracted phase. This is the 5th month in a row of sub 50 reads, and that is far from normal for this report. Global expansion will be what is required to move the PMI read through the 50 area and to signal growth in Canadian business activity, and that may have to wait just a little while longer”. Trade Desk Thoughts: Employment, CPI, Capacity Utilization and Industrial production are impacted by an increase or decrease in PMI activity. “PMI is a closely watched figure for signs of future economic growth. Stronger numbers may lead to revaluations of strength and vice versa. Currency markets can swing confidently on this release and trade desks use the Ivey data as a way of gauging near-term sentiment on the economic outlook” the Team said. “The week is full of high level Canadian releases, and the PMI numbers have printed another negative read that is added to poor Building Permit numbers that were printed earlier today. The real test of pair valuation will be in the fact that the Usd has found buyers on Monday in reaction to equity and oil markets retracing. Once Wall Street stabilizes we could see the reaction to Usd/Cad testing the 200 day SMA area at 1.2415.”

Forex Technical Reaction: The Usd/Cad pair has found support at the bottom of the 4 hour chart channel in overnight trade, and formed a swing point that will be monitored closely this week. “We are on high alert for break on cad” said Trade Team members, “we will be getting trade signals from this pair it seems, the week is loaded with Canadian data that will feed through to price action. TheLFB Pivot Point support at 1.2250 was tested and held on Monday, and we may now trade within the 1.2250-2415 channel.