USD/CAD: Solid NFP print to set up the risk of a push higher – TDS

The Canadian labour market continues to defy gravity with employment rising by another 35K in March. Limited reaction in CAD though. A solid US payrolls number in the upcoming report could support USD/CAD in the very near-term, economists at TD Securities report.

Canadian labour market still red hot in March

“The Canadian labour market added 35K jobs in March, greatly surpassing the market estimate of 7.5K. The unemployment rate was unchanged at 5.0%, and wage growth decelerated from +5.4% YoY to +5.2% YoY.”

“The CAD was little changed following the number though this may be a function of the simultaneous release of US claims data, long weekend liquidity issues and US payrolls tomorrow.”

“The moderation in the wage numbers may be slightly encouraging for the BOC, though the robustness of job growth offers some offset.” 

“The aggressive dovish repricing in the fed funds curve and our expectation for a solid NFP print sets up the risk of a push higher in USD/CAD. Should NFP surprise below consensus, however, 1.3380/00 will be important support.”

See – US Nonfarm Payrolls: Banks Preview, labor market still going strong