CAD remains higher after mixed jobs data

Summary:

• Canadian employment change: 9.3k vs 10.0k exp

• Full time roles decline by 18.9k

• CAD remains higher against most of its peers

With the eyes of the trading world firmly focused on the NFP report, it is easy to overlook the Canadian equivalent which is released at the same time. The latest data showed an employment change of 9.3k which was roughly inline with forecasts of 10k and while it represents a sizable drop on the prior print of 94.1k it remains fairly solid on the face of it. Also on the positive side was a better than expected unemployment rate reading, with the figure remaining at 5.6% when the median estimate was for a tick higher to 5.7%.

The latest full time employment change showed a drop of 18.9k but this was offset by a 28.3k increase in part time jobs, which overall gives the reading of 9.3k - allow for rounding errors. One quirk of the Canadian jobs numbers is that they are often made up of a significant portion of part time roles, therefore meaning jobs added are less likely to persist in employment than if they were permanent. Despite the latest mix of full time/part time roles the bigger picture is more encouraging as the number of permanent roles in Y/Y percentage change remains solid compared to recent years while the temporary jobs equivalent is towards the lower end. The latest numbers could well be suffering from seasonal impacts with more temporary roles around the festive period than permanent ones.  

The Y/Y % change in permanent jobs remains solid despite the recent drop, which could well be caused by seasonal effects. Source: XTB Macrobond

After a period of fairly subdued trade around the 2018 peak of 1.3661, there’s been some strong selling evident in the USDCAD pair. Since the simultaneous release of US and Canadian jobs data the market has remained near the lows which is perhaps telling as the buck is rising against most of its other peers since. Price has fallen below the 23.6% fib at 1.3454 and this now opens up the possibility of further declines with the 38.2-41.4% region from 1.3325-1.3297 a possible target for shorts.

USDCAD has dropped sharply in recent trade and price has just dropped below the 23.6% fib of the advance seen since September at 1.3454. The 38.2-41.4% fib at 1.3325-1.3297 region is a possible target for shorts. Source: xStation