Looking for a top-tier event to trade but steering clear of the NFP?
Here’s how you can play Canada’s jobs report tomorrow (July 8, 12:30 am GMT)!
Read up on what happened last time, how the Loonie reacted, and what analysts are expecting for the upcoming release.
What happened before?
- Canada added 39.8K jobs in May vs. expected 28.5K increase
- Canadian jobless rate improved from 5.2% to 5.1%
- Broad-based hiring gains driven by full-time work
The employment report for May painted a rosy picture of Canada’s jobs market, as headline and underlying indicators showed improvements.
A total of 39.8K jobs were added for the month, outpacing the earlier 15.3K gain and the estimated 28.5K increase. This was enough to bring the jobless rate down from 5.2% to 5.1% instead of holding steady as expected.
A closer look at the numbers reveals that full-time hiring (+135K) accounted for the pickup in employment while part-time hiring tumbled (-96K). Gains were spread across various industries, with the services-producing sector adding 81K positions.
In addition, average hourly wages ticked higher by 3.9% versus the previous 3.3% year-over-year gain in April. Labor force participation was unchanged at 65.3%.
A quick look at the overlay of Loonie pairs during the jobs release reveals that CAD gains were short-lived against the dollar but were sustained against the euro, pound, and other commodity currencies.
What’s expected this time?
- Canadian economy to add 20K jobs in June
- Jobless rate likely to hold steady at 5.1%
Analysts aren’t exactly setting the bar high for the June report, as estimates are pointing to a 20K increase and no change in the unemployment rate.
Traders are still likely to pay close attention to full-time and part-time employment, as well as which sectors report gains in hiring. The participation rate and average hourly wages might also garner some attention since these would point to tightness in the labor market.
In any case, stay on the lookout for any upside or downside surprises since these might trigger a large reaction among Loonie pairs. Another stronger than expected result could bolster BOC tightening hopes, which might spur another leg higher for the Canadian currency.
And, as always, if you’re not comfortable trading around additional volatility, there’s no shame in sitting on the sidelines and watching the event unfold!