Canadian Dollar: Jobs data and BoC path – ING

ING’s Francesco Pesole expects Canada’s September jobs report to show a modest payroll rebound and slightly higher unemployment, not enough to justify an October Bank of Canada hike. He notes that a December move is fully priced, while USD/CAD remains dominated by the Dollar, with a sustained move below 1.420 seen as requiring better global bond conditions.

Limited CAD support from labour data

"Today, the Canadian jobs report for September is expected to show a partial rebound. Consensus sees payrolls at +10k after August’s 42k contraction, and unemployment ticking higher to 6.5%."

"The figures shouldn’t scream ‘October hike’, but can definitely consolidate expectations for a move by the Bank of Canada in December, which is fully priced in."

"The impact on the Canadian dollar shouldn’t be big. CAD has lost around 3% in the past month against USD, but is still in the upper half of the G10 scorecard. US-Canada tensions have been put on the back burner by FX investors, and the USD remains totally dominant in USD/CAD."

"Improvement in global bond markets remains necessary for the pair to return sustainably below 1.420. The prospect of a Bank of Canada hike can lend some help only on the margin."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)