The March LFS will capture an economy in rapid transition from full employment to one experiencing double-digit unemployment rates. Meanwhile, after coiling lower towards 1.40, the move is beginning to look a bit too good to be true for USD/CAD, according to analysts at TD Securities.
“We pencil in just 350k jobs lost during the month, which would represent the largest decline on record, but note there is scope for a significantly weaker print. This would push the unemployment rate to 7.3% and while hourly wage growth should hold near 4% y/y, we expect to see a pullback in weekly wage growth owing to fewer hours worked.”
“The market will need to calibrate to the economic reality and as such, USD/CAD will need to adjust – higher. This report should be a crude reminder of that, and we remain long USD/CAD.”
“Fade dips (when liquidity permits) towards 1.3920; interim resistance located at 1.4080, which will be the gateway to a return towards 1.43+.”