Dailyfx | Mar 13, 2015 06:53AM ET
Trading the News: Canada Net Change in Employment
A 5.0K contraction in Canada Employment paired with an uptick in the jobless may drag on the loonie and produce fresh 2015-highs in USD/CAD as it fuels speculation for a further reduction in the Bank of Canada’s (BoC) benchmark interest rate.
What’s Expected:
Why Is This Event Important:
Even though BoC Governor Stephen Poloz endorses a wait-and-see approach, a dismal labor report may encourage the central bank to adopt a more dovish tone at the April 15 policy meeting in order to encourage a stronger recovery.
Expectations: Bearish Argument/Scenario
Release |
Expected |
Actual |
Housing Starts (FEB) |
179.0K |
156.3K |
Building Permits (MoM) (JAN) |
-4.0% |
-12.9% |
Retail Sales (MoM) (DEC) |
-0.8% |
-2.3% |
The slowdown in private sector consumption paired with the ongoing weakness in the housing market may drag on employment, and a marked contraction in job growth may heighten the bearish sentiment surrounding the Canadian dollar as the BoC remains cautious on the economy.
Risk: Bullish Argument/Scenario
Release |
Expected |
Actual |
Raw Materials Price Index (MoM) (JAN) |
-6.3% |
-7.7% |
Quarterly Gross Domestic Product (Annualized) (4Q) |
2.0% |
2.4% |
Gross Domestic Product (MoM) (DEC) |
0.2% |
0.3% |
Nevertheless, lower input costs accompanied by the pickup in private sector activity may encourage Canadian firms to boost their labor force, and a positive development may keep the USD/CAD range intact as the BoC looks to retain its current policy over the near-term.
How To Trade This Event Risk (Video )
Bearish CAD Trade: Canada Sheds 5.0K Jobs or Greater
Bullish CAD Trade: Employment Report Exceeds Market Expectations
Read More:
Scalping the GBPJPY Reversal- 180.30 Support Key
AUD/USD Retail Crowd Remains Net-Short; 0.7750 in Focus
Potential Price Targets For The Release
Chart - Created Using FXCM Marketscope 2.0
Impact that Canada Employment Change has had on CAD during the last release
Period |
Data Released |
Estimate |
Actual |
Pips Change (1 Hour post event ) |
Pips Change (End of Day post event) |
JAN 2015 |
02/06/2015 13:30 GMT |
5.0K |
35.4K |
+12 |
+8 |
The Canadian economy added 35.4K jobs in the first month of 2015 after contracting a revised 11.3K the month prior. At the same time, the jobless rate fell to an annualized 6.6% from 6.7% the month prior even as the participant rate held steady at 65.7%. Despite the better-than-expected headline print, the pickup in job growth was larger contributed to a 47.2K rise in part-time positions as full-time employment slipped 11.9K in January. Despite the better-than-expected print, the U.S. Non-Farm Payrolls report drove USD/CAD above the 1.2450 region to end the day at 1.2504.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.