Analysts at TD Securities suggest that the loonie will have to contend with both the US and Canadian payroll reports in today’s session, leaving crosses the better way to tactically play the release.
Key Quotes
“TD looks for a headline beat on the US report, though the market has started to upgrade it expectations over the past few days. What’s more a 190k headline print translates into a 0.7-sigma surprise that may not do the USD much favors. On the US side, the details will also be important so wages remain an important cross-check.”
“On the Canada side, we look for an upside surprise that coupled with a US report that keeps ranges in check could offer the loonie a touch more support in the very short-run. By the same token, our short-term dashboard of HFFV and positioning also show the loonie is trading at a modest discount. That leaves some room for a modest correction lower in USDCAD towards 1.34 if the starts align in favor of a good Canadian release and a Goldilocks report out of the US.”
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