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13 Mar 2015
Downside risks to Canada employment data, bullish for USD/CAD – TDS
FXStreet (Barcelona) - The TD Securities Team believes that Canadian employment data to be released ahead might register a -20k decline, which should be catalytic for a USD/CAD move towards 1.28.
Key Quotes
“In North America the highlight will be Canadian employment, where we see downside risks compared to consensus and look for a –20K decline. This should help to keep rate cuts on the markets’ minds, given the BoC is more focused on labour market slack than they have been in the past, although given the typical volatility of the report, it shouldn’t be enough to trigger a complete overhaul in expectations for monetary policy.”
“From the FX side, we think that a very poor number may, all else remaining equal, be the catalyst for a push higher in USDCAD through the January peak just above 1.28 to formally signal the start of a new leg higher in funds (USDCAD currently trading at 1.2725).”
“And in fixed income, we are biased to see steeper 5s10s and 10s30s following the data, while 2s5s should hold around current levels.”
Key Quotes
“In North America the highlight will be Canadian employment, where we see downside risks compared to consensus and look for a –20K decline. This should help to keep rate cuts on the markets’ minds, given the BoC is more focused on labour market slack than they have been in the past, although given the typical volatility of the report, it shouldn’t be enough to trigger a complete overhaul in expectations for monetary policy.”
“From the FX side, we think that a very poor number may, all else remaining equal, be the catalyst for a push higher in USDCAD through the January peak just above 1.28 to formally signal the start of a new leg higher in funds (USDCAD currently trading at 1.2725).”
“And in fixed income, we are biased to see steeper 5s10s and 10s30s following the data, while 2s5s should hold around current levels.”