News

Canada's Employment Change - On the road to recovery?

Fundemental

The Coronavirus outbreak has disrupted data reports to every economy worldwide. Severe measures were implemented to safeguard further fall off with financial support such as tax and mortgage deferrals, temporary wage top-up for low-income workers, low-interest loan programs for businesses, and much more. Canada's coronavirus response fund totals $1 billion, where $275 million is allocated to medical research for finding a vaccine and laughing clinical trials declared on March 11, 2020. Two weeks later on March 25, 2020, Canada backs $75 billion coronavirus relief bill. The relief fund is significantly smaller than its neighboring country, the U.S., which shed a fund over $2.4 trillion. Is the size of Canada's relief fund enough to bring back its economy before coronavirus era?

Canadian jobs losses in March and April were just over 3 million. With 289,000 returned in May and 700,000 expected in June. In May the forecast was for a further loss of 500,000 jobs after the destruction of 2 million in April.  The actual result was an addition of 289,600. The resilience of the labor market is similar to the U.S, where the expectation for the prior two months was for a loss of 5 million workers but in reality, it was a gain of 7.5 million. Last week’s U.S’s NonFarm Payrolls and Unemployment were much better than expected, will Canada produce the same positive outcome?

Technical

  • A better than expected outcome could push the USD/CAD pair lower towards the 1.3500 area which poses a strong support
  • A worse than expected outcome could bring the USD/CAD pair higher towards the 1.3700 area, further reach for 1.3850 zone possibly due to crude oil price drop if demand lessens

Major Economic Events

GMT Country Event Expectation Previous

12:30

CA

Employment Change (Jun)

700

289.6

12:30

CA

Unemployment Rate (Jun)

12%

13.7%


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