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Canada’s labour market could outperform the United States one this year, although analysts at TD Securities are projecting an increase in the numbers below the market expectations.

Key quotes

“The Canadian labour market is expected to begin 2020 on a subdued note, with employment forecast to rise by 10k in January on the heels of a 27k increase for December, which is slightly below the market consensus for 17.5k.” 

“More subdued job growth alongside an expected rebound in the labour force will put upward pressure on the unemployment rate, which we expect to rise to 5.7%, while base-effects should result in a deceleration in wage growth to 3.6% y/y.”

“We do not see an asymmetric setup heading in to this number, and we expect Canadian 10s would outperform by 2-3bps in the event of a 30k+ miss (and vice versa), assuming US nonfarm payrolls rise in line with the market consensus.”