Global macro overview for 07/06/2017:
The Ivey Purchasing Managers Index (PMI) from Canada disappointed global investors by printing the weakest reading for 9 months. The index (which measures a month-to-month variation in economic activity as indicated by a panel of purchasing managers from across Canada, and is prepared by the Richard Ivey School of Business) fell sharply to 53.8 in May from 62.4 in April and it was well below the consensus of 62.0 points. The other two sub-indices have printed mixed results. The deliveries index declined to 44.6 points from 49.1 points that means it has stayed below the fifty level for the sixth straight month now. On the other hand, the inventories index rose sharply to 56.5 points from 46.5 points previously. Moreover, the biggest decline was noted in the prices index: from 70.9 points to 51.3 points and it was the weakest reading for over 2 years. In conclusion, since May 2015 (with one small decrease in June 2016) the Ivey PMI index remains above the threshold fifty level, so it still indicates industry expansion, but remains very violate on a monthly basis. The recent reading in prices, the weakest one in 2 years, might increase concern, whether the underlying inflation pressures have peaked already, so the Bank of Canada might start to take this data into the account for a more serious consideration. For now, the BoC remains optimistic about the overall growth outlook, so the impact on the monetary policy might be limited.
Let's now take a look at the USD/CAD technical picture on the H4 time frame. The recent rally towards the technical resistance at the level of 1.3540 has failed and the higher prices have been rejected. Currently, the market is sliding down towards the 61% Fibo at the level of 1.3441 again. In case of a further deterioration, the next technical support is seen at the level of 1.3387.
