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Huddle up, Loonie traders! We’ve got another big one coming in from Canada later this week, and you wouldn’t want to miss trading this top-tier release.

On Friday at 12:30 pm GMT Statistics Canada will print the labor market numbers for the month of January. If you wanna grab pips off this report like I do, let’s start prepping!

What happened last time?

  • Net employment change: +9.3K vs. +6.8K expected, 94.1K previous
  • Unemployment rate held steady at 5.6% vs. expected rise to 5.7%
  • Labor force participation rate was unchanged at 65.4%

For the month of December 2018, the Canadian economy once again beat market expectations with a larger than expected increase in hiring of 9.3K versus 6.3K. However, this figure paled in comparison to the whopping 94.1K jump in employment from the previous period.

A closer look at the underlying data for December reveals that full-time employment actually slid by 18.9K, which means that the gains were driven by part-time hiring to the tune of 28.3K.

In other words, the labor situation wasn’t as rosy as headline figures suggested and that the numbers were skewed likely by seasonal employment.

Moreover, there was hardly any wage growth to speak of as salaries failed to pick up after their sixth consecutive monthly decline in November. Year-on-year wage growth held steady at 1.5% for the last month of 2018.

Still, the running total for the previous year wasn’t all that bad as employment was up 163K for 2018, buoyed by a 185K increase in full-time work.

CAD Forex Pairs 15-min Charts
CAD Forex Pairs 15-min Charts

The Loonie had a mostly bullish reaction to the release, drifting higher versus the dollar, yen, and euro for the rest of the trading session. However, the Canadian currency seemed unable to hold on to its gains versus the pound, Kiwi, and Aussie then.

What’s expected this time?

  • Net employment change: 6.0K vs. 9.3K previous
  • Unemployment rate to tick higher from 5.6% to 5.7%
  • Labor force participation rate to hold steady at 65.4% again

Number crunchers aren’t expecting stellar jobs gains from Canada to start the year, projecting an even slower pickup of 6.0K compared to the earlier 9.3K increase. With that, the unemployment rate might rise to 5.7%.

The Ivey PMI report due on Wednesday’s New York session might provide more clues on how the January jobs figures might turn out. Analysts are expecting a climb from 59.7 to 60.2 to reflect a faster pace of industry expansion, so you might wanna check out if the employment component contributed positively.

Trading tips

During the actual release, be sure to look beyond the headline figures and dig a little deeper into the underlying data to have a better understanding of what’s going on.

Whether full-time or part-time hiring is responsible for the gains might play into the Loonie’s reaction, and wage growth is likely to be of interest as well.

If there’s anything we’ve learned from previous releases of this particular report, it’s that the price reaction to the results tends to last for the remainder of the U.S. session.