Employment Rate Change In Canada

Employment change in Canada is better than expected and this will help Bank Of Canada to hike again in next meeting which will be in September.

NFP tomorrow, markets will be focusing on the data, and Canada will release the July Employment Change data as well. It is expected that the Unemployment rate will remain unchanged at 4.9%. 25,000 gain for Employment change is expected vs a June reading of -43,200. Most of the job losses from June headline were due to a decrease of 39,100 part-time jobs.

Full-time employment only lost 4,000 jobs. Expectations for July are gain of 15,000 full-time jobs and a gain of 10,000 part-time jobs. Recall that the Bank of Canada hiked its overnight rate by 100bps at its July 13th meeting and noted that inflation in likely to remain around 8% over the next few months, the growth forecast for 2022-2023 is also decreased. Strong jobs print will help BOC to move forward with rate hike cycle.

USD/CAD is trading in a range between 1.2454 and 1.3077, in July the pair reached a high of 1.3224 then came back into range. After price pulled back into the range it continued lower along trendline dating to 17th June. The low of the move thus far is 1.2767, however the lowest close for the move is 1.2788, which is the 61.8% Fibonacci retracement level from the lows of June 8th to the highs of 14th July.

The Canadian Employment data will be released tomorrow and if the data is better than expected, this will help BOC to hike again in September meeting. If the data is worse than expected, the Central bank may have to think about continuing to hike rates at such speed.