Canadian jobs on fire!

Published date: 07/12/2018

While the US employment report may have underwhelmed, the Canadian payrolls release saw a huge rise in employment to the tune of a little over 94k.  This met with a strong response from the CAD, which shot lower from pre 1.3400 levels where it consolidated ahead of the data.   Much of the job gains were in full-time employment, and this was close to 90k, while part-time also rose to make up the balance in the headline number. 

After a week where the BoC have adopted a slightly dovish tilt to their statement, the central bank may have to rethink things again, as based on these numbers, the economy is showing clear underlying strength, as per the comments from Poloz regarding economic activity running close to capacity.  

To add some tailwinds to today's move, Oil price is also moving higher with OPEC now close to agreeing on production cuts, so there is every reason to believe that the CAD could extend its recovery into the North American pm session.

USD/CAD has now stalled on the downside at 1.3280-85, with dip buyers trading off technicals more than anything else, much as we have seen with the EUR (vs USD), which has also run into sellers again above 1.1400.  1.3250-60 is the next notable support point which may well be tested in this downturn.


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