USD/CAD: Loonie to benefit only temporarily from a positive Canadian jobs report – Commerzbank

Ahead of the central bank meeting next Wednesday market attention will focus on today’s labour market report for March. A positive reading could lift the Canadian dollar, just temporarily though, economists at Commerzbank report.

Labour market report comes into focus

“The analysts’ consensus determined by Bloomberg expects a slight fall in unemployment to 5.4% and a rise in the number of employed by roughly 80K.”

A tightening labour market and above all accelerating wage rises are likely to “support expectations of central bankers hitting the brakes harder to counteract an acceleration of inflation.”

“The majority of analysts surveyed by Bloomberg now expect the BoC to raise its key rate by 50 basis points to 1%. The OIS-based rate expectations suggest that a large rate step is more or less completely priced in by the market. We, therefore, expect the loonie to benefit only temporarily from a positive labour market report, if at all.”

See – Canada Employment Preview: Forecasts from five major banks, building on the remarkable surge seen in the prior month