“TD expects job growth to rebound to 10k in June, which would be sufficient to recover the 7.5k jobs lost in May while extending the relatively soft pace that has persisted since January,” TD Securities analysts said in their Canadian employment review.
Key quotes
“Job growth should be led by full time positions, which would add a modestly upbeat tone to the report, while part time employment should underperform after a 20k gain in May. Wage growth should remain unchanged at 3.9% y/y for permanent employees with risks tilted to the upside on the minimum wage hike in BC.”
“With markets already priced for a hike by the BoC next week, the jobs number may hold little relevance for CAD overall especially in a holiday-interrupted week. Indeed, a lot of good news may now be in the CAD and given that it has traded on its front-foot in recent sessions, the currency may be more vulnerable to disappointment in the jobs data rather than a positive surprise.”
“This may be partially dependent on the simultaneous release of the US jobs report, we would look to use any residual CAD strength to scale into downside CAD exposure as markets look poised to be setting up for a buy-the-rumor/sell-the-fact scenario with the BoC rate decision next week and the escalation in trade barbs. 1.3120/50 is a notable pivot point to engage in such a strategy in USDCAD (with an eye to 1.35 in the coming weeks), while we think NZDCAD should make another test of the 200-dma near 0.9040 in the coming days.”
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