BabyPips.com FX-Men Team
BabyPips.com
Planning on trading the news during this event-filled week? Well I’ve got a quick Forex Trading Guide for the Canadian jobs report that might help you score some pips. Let’s get started, shall we?
In Canada, the jobs report is comprised of two main components: the employment change reading and the unemployment rate. The former indicates the increase or decrease in the number of employed Canadians over the reporting period while the latter shows the percentage of the total work force that is jobless and actively seeking employment.
Now part-time employment ain’t necessarily bad but these positions don’t contribute much to long-term jobs growth. For instance, the October report indicated that 35.4K out of the 44.4K positions added during the month were from election-related hiring. Meanwhile the natural resources and energy sector continued to shed jobs since falling oil prices have been forcing companies to scale back production.
With the Canadian federal elections already over, analysts predict that there wouldn’t be much part-time jobs added during the previous month. Full-time hiring trends haven’t been so upbeat in the past few months, which is probably why a negative figure is expected this time. To top it off, further layoffs in oil-related companies might have still weighed on jobs growth.
Of course traders are likely to take a closer look at the underlying components of the report to gauge whether the headline figures are misleading or not. Another month of mostly part-time hiring gains could keep the Loonie’s gains in check while a strong pickup in full-time employment could spark a very bullish reaction.
Keep in mind, however, that the Canadian employment figures are set to be released at the same time as the U.S. non-farm payrolls report, which is notorious for stealing the USD/CAD show. If you’re looking to focus on the Loonie’s forex reaction, don’t forget to check out the currency crosses such as EUR/CAD or NZD/CAD. Oh, and lemme remind you that the OPEC meeting is also scheduled close to this jobs release so that might shake things up a bit!
What is this event all about?
Jobs reports are considered leading indicators of economic performance, as a stable labor situation boosts consumer confidence and spending. This then keeps domestic demand healthy, which is good for business activity. On the other hand, a weakening labor market could lead folks to be tight-fisted with their hard-earned cash, keeping a lid on purchases and production.In Canada, the jobs report is comprised of two main components: the employment change reading and the unemployment rate. The former indicates the increase or decrease in the number of employed Canadians over the reporting period while the latter shows the percentage of the total work force that is jobless and actively seeking employment.
How did previous releases turn out?
The headline jobs numbers have been looking pretty good, as the Canadian employment change figure has come in positive and higher than consensus in the past three releases. However, things aren’t looking so good beneath the surface since majority of the employment gains were simply spurred by part-time hiring.Now part-time employment ain’t necessarily bad but these positions don’t contribute much to long-term jobs growth. For instance, the October report indicated that 35.4K out of the 44.4K positions added during the month were from election-related hiring. Meanwhile the natural resources and energy sector continued to shed jobs since falling oil prices have been forcing companies to scale back production.
What’s expected this time?
The Canadian jobs report for November is up for release on December 4 (Fri) 2:30 pm GMT and is expected to show a 0.7K drop in employment, enough to keep the jobless rate unchanged at 7.0%.With the Canadian federal elections already over, analysts predict that there wouldn’t be much part-time jobs added during the previous month. Full-time hiring trends haven’t been so upbeat in the past few months, which is probably why a negative figure is expected this time. To top it off, further layoffs in oil-related companies might have still weighed on jobs growth.
How might the Loonie react?
A larger than expected drop in employment could mean more trouble for the Canadian economy, yielding a bearish forex reaction from the Loonie. On the other hand, stronger than expected jobs data could show reflect jobs market resilience, keeping the Canadian dollar afloat against its forex counterparts.Of course traders are likely to take a closer look at the underlying components of the report to gauge whether the headline figures are misleading or not. Another month of mostly part-time hiring gains could keep the Loonie’s gains in check while a strong pickup in full-time employment could spark a very bullish reaction.
Keep in mind, however, that the Canadian employment figures are set to be released at the same time as the U.S. non-farm payrolls report, which is notorious for stealing the USD/CAD show. If you’re looking to focus on the Loonie’s forex reaction, don’t forget to check out the currency crosses such as EUR/CAD or NZD/CAD. Oh, and lemme remind you that the OPEC meeting is also scheduled close to this jobs release so that might shake things up a bit!
BabyPips.com does not warrant or guarantee the accuracy, timeliness or completeness to its service or information it provides. BabyPips.com does not give, whatsoever, warranties, expressed or implied, to the results to be obtained by using its services or information it provided. Users are trading at their own risk and BabyPips.com shall not be responsible under any circumstances for the consequences of such activities. Babypips.com and its affiliates will not, in any event, be liable to users or any third parties for any consequential damages, however arising, including but not limited to damages caused by negligence whether such damages were foreseen or unforeseen.
Recommended Content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
GBP/USD consolidates above 1.2500, eyes on US PCE data
GBP/USD fluctuates at around 1.2500 in the European session on Friday following the three-day rebound. The PCE inflation data for March will be watched closely by market participants later in the day.
Gold clings to modest daily gains at around $2,350
Gold stays in positive territory at around $2,350 after closing in positive territory on Thursday. The benchmark 10-year US Treasury bond yield edges lower ahead of US PCE Price Index data, allowing XAU/USD to stretch higher.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.