Canadian Employment Data

Canadian Employment data releases will take place today at 1.30pm BST. The headline change is expected at 3,800 with a high of 40,000 and a low of -45,000. A deviation near or outside these extremes will see an immediate spike in CAD however whether this move continues will depend mainly on short-term price direction in oil.

Description:

Released monthly by Statistics Canada,the headline number measures the change in the number of employed people during the previous month. This is vital economic data released shortly after the month ends. The combination of importance and earliness makes for hefty market impacts. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

The unemployment rate measures the percentage of total work force that is unemployed and actively seeking employment during the previous month. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labour market conditions.

Summary:

Due to Canada’s dependence on oil as one of its major exports, the Canadian dollar is highly correlated with the oil market. WTI has has rallied $25 in an almost linear fashion since January lows. This has supported the CAD. In terms of monetary policy outlook, the BoC is on hold and inflation is within target. Employment has been reasonably solid over the last year with most months seeing jobs added.

Canadian Employment data releases were also covered in this weeks weekly risk events video here.

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Source:: Canadian Employment Data