• Canadian employment change 35.2k vs 15.0K
  • Strong full time/part time split
  • Canadian dollar making strong gains

Whilst the US NFP attracts the Lion’s share of the attention the Canadian equivalent is released at the same time and can often provide a nice opportunity – especially if we get a divergence in the releases as we have today (Weaker US and strong Canadian). 

For the month of October the Canadian economy filled 35.2k additional jobs which was significantly above the 15k expected and the prior month showed a rise of 10k. ON the face of it this is clearly a strong data point but as we saw a couple months ago, the composition of the jobs in Canada is important.

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 The jobs report also included a second consecutive strong rise in full time roles. Source; Bloomberg, Statistics Canada

The August release was seemingly strong (+22K) on the face of it but the report revealed that there had in fact been a large drop in full time jobs offset by an even larger rise in part time placements. Along these lines today’s release is pleasing with full time jobs coming in at 88.7k after 112k prior and part time jobs fell once more by 53.4k against -102k prior. 

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 Average hourly earnings and hours worked both also rose strongly. Source: Bloomberg, Statistics of Canada

Furthermore, average earnings increased at the fastest rate since April 2016 with a 2.4% rise. An all round solid report was capped off with the number of hours worked Y/Y which rose by 2.7% in what is the largest increase in this metric since August 2011. 

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 The market reaction has seen a strong move higher with CAD rising across the board. Source: xStation

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 USDCAD has dropped around 100 pips since the two releases, with the pair being hit on both sides from the weaker US data and the stronger Canadian. The pair has now retrace to the 23.6% fib level of the recovery rally seen since the September low. Source: xStation