Andrew Pyle Canadian Quotations

May delivered another dose of unexpected strength in Canadian job creation.

From a sector point of view, there would be very few 'safe' havens on the Canadian equity landscape if this scenario materialized.

I think the biggest risk to Canadian equities (in 2006) is that we see a more aggressive spike higher in the Canadian dollar, which does put pressure on earnings and obviously competitiveness.

We can attribute some of last month's decline to the rise in the Canadian dollar and increased concern among companies as to the impact this will have on export penetration and earnings, but at the end of the day the Ivey has never been a valued directional indicator because of its volatility and desks may partially dismiss the decline as a result.

While the recovery above the break-even threshold is a relief, it remains well back of the highs set in the fourth quarter and we would suspect that the appreciation in the Canadian dollar is restraining optimism.