Data from Stats Canada this morning showed that Canada’s jobs market contracted slightly last month, coming in below expectations after two-months of exceptionally strong gains.
On a seasonally adjusted basis, Canada lost a net -7.2k jobs. Market expectations ranged from +6k to +10k new jobs.
Canada’s jobless rate was unchanged from the previous month at +5.8%, matching expectations.
In Q4 2018 and Q1 2019, Canadian data has revealed a period of weakness, which Governor Poloz at the Bank of Canada (BoC) has referred to as “a detour,” and said in March that he “anticipates growth will get back on track later this year.”
The loonie is currently trading at the low of the day outright, just shy of the C$1.3400 handle at C$1.3384. with stronger commodity prices, the market seems interested in buying CAD on USD rallies above C$1.3410-20 in the short term.
The ‘big’ dollar has been well bid in early trading on a strong non-farm payroll (NFP) headline print (+196k vs. +172k). It’s the ideal report for supporting risky assets – strong hiring, combined with muted wage growth (average hourly earnings +0.1% m/m vs +0.2e). There is nothing in today’s report to suggest the U.S labor market is rolling over nor is there anything to suggest that inflation could pick up at a pace that pushes the Fed to rethink its dot plan.
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