<p>Yesterday, Bank of Canada governor Tiff Macklem <a target=“_blank“ href=“https://www.forexlive.com/centralbank/bocs-macklem-we-need-additional-info-before-we-consider-moving-to-more-balanced-policy-20221006/“ target=“_blank“>said </a>more data is needed before moving to shifting to an interest rate pause. Today he will get it, with Canadian jobs to be released alongside non-farm payrolls.</p><p>Unlike in the US, Canadian jobs have showed a material deterioration in the past few months. The data is notoriously volatile but there have been three months in a row of losses near 40K. For those who follow the US, a rule of thumb is to multiply by 10, so this would be the equivalent of three months in a row of non-farm payrolls of -400K.</p><p>The consensus today is +20.0K.</p><p>The unemployment rate has ticked up to 5.4% from 4.9% and is expected to stay there.</p><p>As always, the breakdown of full-time and part-time jobs is an important consideration for Canada. Last month there were 77..2K full time job losses, which was the worst since January.</p><p>The Canadian dollar has recently broken down to the lowest levels since May 2020 and the next leg depends on what the BOC does next. A quick pivot is unlikely as Macklem said yesterday that more rate hikes „will be needed“ and market pricing for a 50 bps hike on Oct 26 is 98%, which would take rates to 3.75%.</p><p>From there, a likely path is for the BOC to slow to 25 bps and then pause at year end. A big surprise in today’s jobs report could change the equation but if you’re trading USD/CAD, it will be challenging with the US report due at the same time.</p>

This article was written by Adam Button at forexlive.com.