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Canadian Labor Market Talking Points:

  • Canada lost 1010.7k jobs in March, falling short of the expectation of -500k.
  • The Canadian Dollar[1] shows signs of strength following a stable end to March.
  • Markets begin to weigh estimates of Canada Q2 annualized GDP in the range of -20% to -35%[2].

Canada Net Change in Employment Falls Short of the Expectation

As the theme of poor employment data out of the US[3] begins to spill into Canada, March unemployment saw a sharp rise from 5.6% to 7.8% over the previous month. This morning’s print wipes out over a full year of jobs added[4] in the Canadian labor market.

Canada Net Change in Employment

Chart Prepared by Austin Sealey; Canada Net Change in Employment

The month ending BOC emergency rate cut[5] from 0.75% to 0.25% came in following several cuts over the previous weeks from 1.75%. Sitting so close to a zero rate of interest, Canada has little room to edge lower before weighing the decision of negative rates. This aggressive monetary easing has not just been in anticipation of a labor market shock, but it has been in response to massive oil price volatility[6] – one of Canada’s primary exports.

As the Saudi-Russian oil[7] price war has begun taking steps toward a resolution in past weeks, the Canadian Dollar[8] has stabilized. However, this bout of strength may not last as market appetite for risk levels off and demand for safe havens[9] rises. Up next today is University of Michigan Sentiment followed by US CPI tomorrow[10].

--Written by Austin Sealey, Contributor for DailyFX.com

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