The jobs were not great but the wages impress the market

The USDCAD trades near the lows for the day and is also close to a triple bottom on the hourly chart from yesterday’s trading at 1.2935. The low today just reached 1.2936 so far. A move below, would also take out the 38.2% of the range since May 22. That comes in at 1.2942.  The price traded as low as 1.2856 this week. Ahead of that is the 50% of the 3 week trading range at 1.29041.

Today, the jobs figures showed the second consecutive drop in jobs.  The net change in jobs came in at -7.5K. In April, the job losses totaled -1.1K.  Although the declines are small, it represents the first back to back declines since Nov/Dec 2014.  Despite the falls, the unemployment rater remained at 5.8%.  

What is helping the CAD (lower USDCAD) is the wages. They rose by a greater than expecte 3.9% for year. That is the highest since July 2012 when it also rose 3.9%. Prior to that, you have to go back to April 2009 for a higher wage number (see chart below).  The expectations today was for a more modest 3.2%.  

Over the last year, despite the falls today, Canada has added 238K new jobs this year.  

Full time jobs today also disappointed at -31K. However, like the total jobs, for the year, full time jobs have added 289.7K new jobs this year.  

The expectations remain near high levels for a 25 bp tightening at the July meeting. Yesterday, the market implied a 78.5% chance. Today, the probability dipped to 77.6%.

PS. The price has just dipped below the lows from yesterday and traded to 1.2929.

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