Job data from US and Canada are the two main focuses in US session.
NFP market expectations: –
- Headline NFP number: 205k
- Unemployment rate 4.0%
- Average hourly earnings: 0.20% mom
Other job released data includes ADP at 235k. ISM manufacturing employment rose from 54.2 to 59.8. ISM services employment dropped from 61.6 to 55.0. Initial claims and continuing claims were both at historically low level during the month. Hence, it’s more likely for headline NFP to deliver, or even surprise to the upside. The key is again on wage growth, which will determine the chance of the fourth Fed hike this year.
Canada employment, market expectations: –
- Net change in employment: 21k
- Unemployment rate: 5.9%
Being exempted temporarily from Trump’s steel and aluminum tariffs is a relief for BoC. But the neverending NAFTA renegotiation is still a risk. Adding to that, if NAFTA talks fail, the tariffs will more likely come back than not. So BoC will likely stand pat until the picture because clearly. Risks will be more skewed to the downside for CAD on today’s release.
USD/CAD is staying in consolidation from 1.3000, holding quite well above 38.2% retracement of 1.2614 to 1.3000. This 1.3000 level will be the key to watch as a break could trigger upside acceleration when rise from 1.2246 resumes.
