Data Review
- IVEY PMI 49.4 vs. 53.1 Previous
- Building Permits -0.3% vs. -6.3% Previous
- Housing Starts 188.6K vs. 191K Previous
- New Housing Price Index 0.3% vs. 0.2% Previous
- Net Change in Employment 13.8K vs. -2.1K Previous
- Unemployment Rate 6.9% vs. 7.1% Previous
Data Preview
- CPI – Potential upside surprise given sharp rise in price component of IVEY PMI
Key Levels
- Support 1.2600
- Resistance 1.3000
USD/CAD is trying to form a base despite surprisingly strong employment numbers. More than 13K jobs were created in the month of May, which was slightly better than the 1.8K forecast but the job growth mix was very encouraging with a rise of 60.5K full time jobs and drop of -46.8K part time jobs. The unemployment rate also fell to 6.9% from 7.1%, the lowest level since July 2015. Although part of the improvement can be attributed to the decline in the participation rate, economists actually expected a rise in the jobless rate. The government says 19K jobs were due to census hiring but even at +41K, the numbers are strong. The Bank of Canada won’t be pressed to lower interest rates with this type of report and that should keep USD/CAD under pressure as long as oil prices hold steady or better yet, rise.
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