There is no denying it and no real excuse for it, the pitiful Canadian jobs report that shred -$54k jobs yesterday certainly overshadowed Friday’s dismal US employment report (+88k vs. +200k). The country with the loonie and 35-million inhabitants happened to lose -51k full-time jobs and -400 part-timers. The employment miss was the largest in three-years, since the last recession, as all the Canadian job components underperformed.
Not helping the loonie and in fact making matters worse was the softer than forecasted trade data (-$1.02b vs. +$0.2b). All of this had Canadian yields falling much faster, especially further out the curve, than its US counterpart. The only ‘ray of sunshine’ on the economic front came from March’s Canadian Ivey PMI headline print. On a seasonally adjusted basis the PMI was at 61.6, indicating that purchasing activity improved in February. The employment sub-index was at 53.1, indicating that employment was higher than last month and just maybe this week’s employment report is just another blip in this long and bumpy road.
This is considered a major setback for the Canadian bull; who managed to push the CAD higher throughout the month of March. The mighty green dollar was capable of printing a new monthly outright low and now more so since the CAD jobless rate has rallied to +7.2% in March from +7% in February. The participation rate –the number of people in the labor force, fell to +66.6. Where to now? Nowhere fast after Friday’s currency carnage that’s for sure. The upside level of 1.0250 remains a formidable resistance level for now, along with dollar support 1.0135.
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