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Tomorrow at 12:30 pm GMT, Canada will print its labor market numbers for the month of June.

With no other major catalysts on tap this week, the event just might inspire solid intraday moves for the Loonie.

Planning on trading the event? Here are the points you need to know first:

What happened last time?

  • A net of 290K jobs was added in May after a 1.9M drop in April
  • The unemployment rate ticked higher from 13.0% to 13.7%
  • Labor force participation rate jumped from 59.8% to 61.4%

Canada saw a net job addition of 290K jobs May, much better than the 500K increase expected and a relief after 1.9M had lost work in April.

Meanwhile, the jobless rate hit a record high of 13.7% as easing lockdown restrictions brought a lot of job seekers in the market.

Overlay of CAD 15-Minute Charts
Overlay of CAD 15-Minute Charts

The better-than-expected numbers, combined with higher oil prices and an improvement in risk sentiment, pushed the Loonie higher during the release and the rest of the trading session.

What are traders expecting this time?

  • A net of 600K workers may have found jobs in June
  • Unemployment to ease from 13.7% to 11.9%
  • Participation rate could inch up from 61.4% to 61.6%

Analysts see a net addition of 600,000 jobs as Canada continues to ease lockdown restrictions.

Demand for front line retail and health care sectors will still be elevated while the reopening of manufacturing and construction businesses is expected to create more jobs in June.

Earlier this week, the IVEY PMI, a leading indicator for the official labor market numbers, printed above the expansionary 50.0 mark for the first time since February. What’s more, the unemployment index – which dipped to a low of 22.9 in April – also shot up to 52.8 in June!

Even the Organization for Economic Co-operation and Development (OECD) is optimistic about its labor market estimates, saying that Canada’s unemployment rate has “peaked at 11%” in Q2 2020.

Trading tips

BOC Governor Macklem recently hinted that he and his team will now shift focus from market stabilization back to meeting stimulus and 2.0% inflation targets.

This means that BOC will pay closer attention to full-time employment numbers as well as trends that might affect consumer spending patterns.

Oh, and don’t forget to consider broader economic themes in your trades!

Bearish themes such as concerns over rising coronavirus cases, or bullish catalysts like jumps in high-yielding equities and oil prices can make or break the Loonie’s intraday trends after the report is released.

Still, deciding which currency to trade against the Loonie? Check out this MarketMilk™ performance ranking of CAD pairs to help you gauge which might be the strongest bullish or bearish rivals:

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.