There is again no Canadian data, and the near-term USD/CAD outlook might cause a few furrowed brows at the BoC who were likely much relieved to have had a sizeable positive gap between spot USD/CAD and 1.10. Today is dominated by news on the health of the US consumer, and though none of the data releases are key, they will give a reading on the pulse of the consumer side of the US economy. No small matter as over 70% of the US economy is dependent on an eagerness and ability of Americans to spend, spend, spend. May personal income and spending are due and each are expected to be up 0.3%. Resist any temptation to deem such an outcome a “green shoot.” A 0.3\% gain income would still result in the first negative y/y print on personal income since at least 1960. In fact, compensation has been negative y/y for the past two months, again something unheard of since 1960, and largely due to a slide in private sector pay packages. The only reason that disposable income remains in positive y/y territory is because of transfers from the government, which can’t become a longterm source of spending power. (Where’s my stimulus cheque?) And there is precious little good news on the employment front. Instead, given that record numbers of jobless are exhausting their unemployment benefits, if anything, the outlook seems as challenging as at any time in the current crisis.
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