Canada: Strong labour market data - TDS

Analysts at TD Securities note that the Canadian economy added 28k jobs in May, defying expectations for some moderation in job growth (market: +5k, TD: -5k).

Key Quotes

“The combination of job growth and a pullback in labour force participation pushed the unemployment rate to 5.4%, the lowest on record, while wage growth held steady at 2.6% y/y.”

“The one wrinkle was that self-employment (+62k) accounted for all new jobs, with public and private employment down 34k. Still, this keeps the broader trend intact which should give the Bank of Canada comfort with their current policy stance.”

“FX: The FX market focused on the US jobs report, where a big miss on nonfarm payrolls helped to reinforce the recent correction in the USD while the Canadian data could offer some near-term support for CAD. The 200dma near 1.3274 is the next key pivot level.”