Aside from U.S. data this morn­ing, we also had a few impor­tant releases from Canada. Cana­dian employ­ment printed much stronger than expected ear­lier in this morn­ing and just a few min­utes ago, IVEY PMI beat expec­ta­tions. Last month, man­u­fac­tur­ing activ­ity expanded by a faster rate with the IVEY PMI index ris­ing from 51.8 to 55.70, mark­ing the third con­sec­u­tive month of growth. Aside from the drop in the employ­ment com­po­nent, the details of the report were encour­ag­ing. The con­trac­tion in employ­ment was in line with the weak­ness that we saw beneath this morning's Cana­dian employ­ment num­bers and is part of the rea­son why the Cana­dian dol­lar has strug­gled to rally.

Cana­dian Employ­ment: Weak­ness Beneath the Headlines

This morning's Cana­dian employ­ment num­bers were very strong. The mar­ket had antic­i­pated the fourth month of job losses but instead Cana­dian employ­ment rose by 27.1k, the first month of job growth since April. In con­trast to the U.S. who reported the 20th con­sec­u­tive month of job losses, in that same time, Canada only saw 11 months of net job losses and they were not even consecutive.

Part of the rea­son why the Cana­dian econ­omy has been so resilient is because of the rebound in oil prices and demand from China. How­ever weak­ness beneath the head­lines is cap­ping the gains in the Cana­dian dol­lar. First, the rise came pri­mar­ily from the ser­vice sec­tor and exclu­sively in part time work while full time employ­ment actu­ally fell by 3,500. So far this year, full-time jobs have decreased 403,700 while part-time jobs have risen 101,100.

When a labor mar­ket recov­ery is dri­ven by part time and not full time hir­ing, it is def­i­nitely not all that pos­i­tive. The man­u­fac­tur­ing sec­tor is also extremely impor­tant in Canada and so the lack of improve­ment in the sec­tor is cer­tainly discouraging.

Kathy Lien is an Internationally Published Author and the Director of Currency Research of FX360.com and GFT. As Director of Currency Research, Kathy is responsible for providing research and analysis for GFT. She also runs an FX Signal Service BKForex Advisor, with Boris Schlossberg – one of the few investment advisory letters focusing strictly on the 3 Trillion/day FX market. Kathy is a “Trader First, Analyst Second.” She publishes both technical and fundamental research reports, market commentaries and trading strategies. A seasoned FX analyst and trader, Kathy has direct interbank experience. Prior to joining GFT, Kathy was the Chief Strategist of DailyFX.com and worked in JPMorgan Chase’s Cross Markets and Foreign Exchange Trading groups using both technical and fundamental analysis to trade FX spot and options. She also has experience trading a number of products outside of FX, including interest rate derivatives, bonds, equities and futures. She has taught seminars around the world on day and swing trading the currency market. Kathy frequently appears on CNBC, Bloomberg, and BNN as a expert commentator on currency markets. Read more from the author/contributor here.

Comments

Comments are closed.