Canada: Job growth to slow to 12k in September – BBH

Analysts at BBH point out that Canada will report its September employment figures today and the median forecast expects Canadian job growth to slow to 12k after a 20k increase in August.  

Key Quotes

“In the first eight months of the year, Canadian employment rose an average of 27.4k a month.  Last year's average was 19k.  Wage growth, of course, is also important, but the bottom line is that barring a surprisingly strong report, expectations for a hike later this month (Oct 25) are unlikely to rebuild.”  

“Over past few weeks, expectations for another BOC rate hike have fallen but also pushed from this month to the December 6 meeting.  Extrapolating from the OIS, Bloomberg estimates that there is an 18% chance of an October hike and a 65% chance of a hike before the end of the year.  Three weeks ago, the market was pricing in a nearly 50% chance of a hike this month and a 68.5% chance of a hike before the end of the year.  The US dollar recovery against the Canadian dollar continues, and this has been the fourth consecutive weekly advance.  This is the longest such streak since last November.”