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Still looking for more forex volatility? If you are, then you’re in luck! Tomorrow at 1:30 pm GMT Canada will print its labor market numbers for the month of July.

Here are points you should know if you’re trading the event:

What happened last time?

  • Net employment change misses at -2.2K vs. +10.0K expected, 27.7K previous
  • Unemployment rate inches up from 5.4% to 5.5% as expected
  • Labor force participation rate unchanged at 65.7%

After months of showing strength, Canada’s labor market numbers finally took a breather in June.

The economy lost a net 2,200 jobs for the month, much weaker than the 27,700 additions seen in May and the 10,000 increase that analysts had expected.

Unemployment rate didn’t look much better with its jump from 5.4% to 5.5% while participation rate remained at 65.7%.

Luckily for Loonie bulls, traders remembered that Canada’s labor market had shown resilience in the previous months. Of course, it also didn’t hurt that full-time jobs had risen by 24,100 even as 26,200 part-time workers had lost employment.

CAD 15-Minute Forex Charts
CAD 15-Minute Forex Charts

The Loonie ended up falling against the dollar (Uncle Sam printed a much-better-than-expected NFP report) but gained ground against its other counterparts.

What are traders expecting this time?

  • Net employment change: +15.0K vs. -2.2K previous
  • Unemployment rate to remain at 5.5%
  • Labor force participation rate to stay steady at 65.7%

Unemployment rate and labor force participation rate are expected to maintain their June rates. Market geeks expect the economy to get back into job creation mode, though, as they see a net addition of 15,000 jobs for the month in July.

The IVEY PMI report printed earlier this week certainly supports a stronger reading. Heck, the employment gauge rose from 52.7 to a whopping 56.6 in July!

Trading Tips

We know from last month’s release that traders can look beyond the headline numbers for direction. Aside from net job additions, keep an eye out for wage growth as well as the number of full-time jobs created.

In their last policy statement Bank of Canada (BOC) members were confident that “consumption is still supported by a healthy labour market” and that the economy will return to growth following “temporary weakness” in 2018.

If employment (and consumption) prospects remain bright for Canada’s working population, then the Bank of Canada (BOC)’s will have one less reason to follow its peers and cut its interest rates.

If we see back-to-back weak headline jobs data from Canada, however, then traders could speculate on potential easing from the central bank.

Not feeling confident about trading the event at all? That’s okay, you can always stay in the sidelines and observe the Loonie’s reaction to the release.

Either way, make sure you don’t miss one of Canada’s top-tier reports!