10:00am (NY Time) CA IVEY PMI Forecast 52.3 Previous 48.4
ACTION: USD/CAD SELL 55.5 BUY 49.0
We’ll be focusing once again on the IVEY PMI from Canada today, it is the equivalent of both ISM PMI’s out of US where purchasing managers of all sectors of the economy participate in this survey. And as with PMIs, they are all considered as leading indicators with the medium point at 50, therefore a reading of above 50 would be considered as expansion in the economy whereas a reading below 50 would be considered as contraction in the economy.
Our tradable surprise factor is 3.0 as it has provided a good track record; we need to get either a 55.5 or 49.0 (based on 52.3 of expectation) for us to take a trade. IVEY PMI is usually tradable before the Canadian Employment Changes and not after when scheduled at the same day. This should sway public sentiment on Friday if we get a strong reading today, thus the impact of this release may also be more profound.
DEFINITION
“The Ivey Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers from all sectors of the economy, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation’s currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely because purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.”
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