Canada\u2019s Ivey Purchasing Managers Index (seasonally adjusted) was 57.7 in April. The forecast was 49.9.<\/p>\n
A reading above 50 indicates growth in economic activity. A reading below 50 indicates contraction.<\/p>\n
The strong April Ivey PMI data suggests the Canadian economy has unexpected momentum, directly challenging our view of a potential slowdown. This surprise beat forces a reassessment of Bank of Canada (BoC) policy expectations. The market must now consider the possibility that interest rates will remain higher for longer.<\/p>\n
We should look at positioning for a stronger Canadian dollar, which has been hovering near 1.37 against the USD. The combination of this strong domestic data and West Texas Intermediate oil prices holding above $82 a barrel provides a solid foundation for CAD appreciation. This setup is reminiscent of the sharp CAD rally we saw in mid-2025 following a series of robust employment reports.<\/p>\n
Interest rate derivative markets will need to reprice BoC expectations for the coming months. Before this data, overnight index swaps were pricing in a nearly 40% chance of a rate cut by the July meeting. We now expect that probability to fall significantly, making it prudent to consider positions that benefit from higher short-term rates.<\/p>\n
This economic strength should be a tailwind for Canadian equities, particularly the S&P\/TSX 60 index. We can use call options on the XIU ETF to gain bullish exposure, as the index has been trading in a tight range just below its all-time highs. A breakout seems more likely now, especially for domestic-focused sectors like financials and industrials.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Canada\u2019s April Ivey PMI surged to 57.7, beating the 49.9 forecast and signaling economic expansion.<\/p>\n","protected":false},"author":103,"featured_media":17024,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-49645","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t