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CAD jumps after another strong jobs print

15:07 8 February 2019

Summary:

  • Canada January employment: +67k vs +5k exp

  • Almost half the roles were full time: +31k

  • CAD rising across the board after the release

 

Coming exactly one week after its Southern neighbour delivered a stellar set of employment figures, Canada has posted its own set of pleasing numbers from the labour market and provided a boost to the Loonie. For January the Canadian employment change came in at +66k vs an expected +5k, with the prior revised slightly lower to now stand at 8k ( 9k previously). This now marks the best 5-month run of hiring in Canada in 16 years, with an average of 47k jobs added over this period.

 

One aspect of this data release that is particularly important to watch is the number of full-time or part-time roles as this determines how strong and persistent the composition of the jobs will likely be. On this front there was more good news with not far off half, or 31k, of the total jobs added last month full-time in nature. What is all the more pleasing about the recent run in jobs is that it appears to be mainly driven by full time rather than temporary work and this is suggestive of a strong labour market.  

 

Not only has the total number of jobs in Canada enjoyed a strong run of late, but the composition of the roles is especially pleasing with the majority being permanent in nature. Source: XTB Macrobond

 

Looking further at the report, one apparent source of weakness could be the unexpected rise in the unemployment rate which increased to 5.8% from 5.6%, against an expected 5.7%. While an increase here is negative, it can be explained in part by a rise in the participation rate which rose to 65.6% from 65.4% prior. On the whole the data point is good for the Canadian dollar and as you’d expect it has gained in the initial reaction.

The Canadian dollar has perked up since the release and is trading higher against all of its peers. The largest gains come against the AUD and USD. Source: xStation

 

The USDCAD may be lower today but it’s been a good week for longs in the pair with the market managing to end higher each of the past 4 days. The rally has seen the market return to a potentially key resistance level around the 38.2% fib retracement at 1.3326. Today’s high almost perfectly coincided with this and the strong jobs data has now caused a pretty firm rejection. This could be seen to further heighten the case for this as a potential resistance and if price fails to break above there then a pullback towards recent lows and the 61.8% fib around 1.3119 is possible.

 

Aided by the strong jobs number the USDCAD has respected the resistance at the 61.8% fib at 1.3326. This is now a key level to watch going forward and if it holds then a move back towards the 61.8% at 1.3119 is possible. Source: xStation

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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