Canada Jobs Preview:
- According to a Bloomberg News survey, consensus forecasts call for a gain of +100K jobs after an outstanding gain of +259.2K previously.
- Despite the ‘slowdown,’ another +100K jobs is nothing to sneer at: this is roughly the equivalent of a US NFP coming in near +900K.
- Will USD/CAD test its yearly lows? Can CAD/JPY keep its bullish breakout going? Will energy markets remain supportive? We’ll discuss these questions and more in context of the February Canada jobs report starting at 8:20 EDT/12:20 GMT. You can join live by watching the stream at the top of this note.
Impressive Jobs Growth, Still
Like its southern neighbor, the Canadian jobs market is expected to show further improvement in March. However, even absent a robust vaccination effort like the United States, the Great White North is expected to see the same kind of breakneck jobs growth like what was showcased in the March US nonfarm payrolls report.
Consensus forecasts are calling for a gain of +100K from +259.2K in February. The Canadian unemployment rate is set to fall further from 8.2% to 8%. Despite the ‘slowdown,’ another +100K jobs is nothing to sneer at: this is roughly the equivalent of a US NFP coming in near +900K. More Loonie strength may be on the way.
Will USD/CAD reverse its recent gains? Can CAD/JPY maintain its bull flag? We’ll discuss these questions and more in context of the March Canada jobs report starting at 8:15 EDT/12:15 GMT. You can join live by watching the stream at the top of this note.
Read more: Central Bank Watch: BOC, RBA, & RBNZ Interest Rate Expectations Update
IG Client Sentiment Index: USD/CAD Rate Forecast (April 9, 2021) (Chart 1)
USD/CAD: Retail trader data shows 59.17% of traders are net-long with the ratio of traders long to short at 1.45 to 1. The number of traders net-long is 8.36% higher than yesterday and 2.78% higher from last week, while the number of traders net-short is 7.61% lower than yesterday and 8.11% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall.
Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USD/CAD-bearish contrarian trading bias.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
