Canadian S&P Global Services PMI (Jul) 49.1 (Prev. 47.1)

A sub-50 services print with an improving sequential read sits in the familiar category of soft-but-less-soft data: the level still signals contraction, while the direction of travel is what tends to move front-end Canadian rates and the currency. The distinction that matters in these releases is between headline direction and composition: surveys of this type carry employment, new orders and prices-paid subindices, and a rise driven by the prices components has historically been read differently by the Bank of Canada than one driven by demand. Canadian PMI prints have generally been second-tier for the loonie, taking their cue from the broader US-dollar backdrop and crude, with outsized reactions reserved for surprises that alter the policy path rather than confirm a trend. The follow-ons of note are how the services read sits alongside the manufacturing survey and the labour and inflation prints that carry more weight with the central bank. A two-point rise that remains below the breakeven mark has, in past episodes of this kind, been treated as stabilisation rather than recovery.