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The Unemployment Rate in Canada is expected to rise further in July. Further cooling of the labour market could favour extra rate cuts. The Canadian Dollar remains firm so far in August vs. its US peer.   Statistics Canada is set to release the Canadian Labour Force Survey report on August 9. Market participants so far anticipate that the report will present mixed results, which could further support the Bank of Canada’s (BoC) ongoing easing cycle. In July, the Bank of Canada trimmed its policy rate by an extra 25 bps to 4.50%, following a quarter-point interest rate reduction at its meeting in June. Back to the last gathering, the central bank left the door open to further rate cuts if inflation continues to progress towards the bank’s target, while it projects consumer prices to hover around the 2.0% goal in the latter part of 2025. Regarding the domestic labour market, the BoC signalled in June that while it has cooled significantly, wage growth is still elevated when compared to productivity growth. Statistics Canada reported that the Employment Change shrank by 1.4K jobs in June, halting two consecutive months of increases, while the Unemployment Rate ticked higher for the third consecutive month to 6.4%. On another key economic indicator, the central bank now sees the Canadian Gross Domestic Product (GDP) expanding by 1.2% in 2024 (from 1.5%), while it expects annualized GDP to expand by 1.7% in Q1, by 1.5% in Q2, and by 2.8% in Q3. What can we expect from the next Canadian Unemployment Rate print? Attention remains on the upcoming Canadian labour market report, particularly the wage inflation data, which could influence the bank’s decision on whether to continue reducing its interest rates. Consensus among market participants projects a slight rise in Canada’s Unemployment Rate to 6.5% in…

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Filed under: News - @ August 9, 2024 6:26 am