Trade Desk Thoughts - Canadian Employment

Canadian Employment Change Actual 15.2K, Expected 9.0K, Previous -55.2K;
Canadian Unemployment Rate Actual 6.1%, Expected 6.2%, Previous 6.1%

Release Explanation: The release measures the number of jobs created, or the percentage of employed/unemployed in the labor market. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than just as a one-off knee-jerk reaction to these numbers printing.

Trade Desk Thoughts: Employment in Canada increased in August by 15k, following a large decline one month earlier of 55k. The release indicates that the new added jobs are all full-time, a very valuable thing. In 2008 the Canadian economy has added 87,000 new jobs, while in 2007, over the same period there were 221,000 new jobs created. In August, employment increased in educational services; construction; utilities; and accommodation and food services. These gains were partially offset by decreases in health care and social assistance; agriculture and public administration.

The year-over-year hourly wage growth for August was 3.8%, slightly above the most recent increase of 3.4% in the Consumer Price Index. The unemployment rate remained constant at 6.1%, although analysts had estimated an increase of 0.1%. However, looking at the longer picture, the Canadian unemployment rate is in a steep decline, from 7.0% in 2005, to the present 6.1%.

Forex Technical Reaction: The cad made a small spike at the time of the release, but retraced the move soon after. Just before the release the pair broken the neutral pivot point, shedding 70 pips since the U.S. session closed yesterday

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