Jobs data will be published in Canada, but the implications for the Bank of Canada (BoC) policy should be limited, in the view of economists at ING. USD/CAD is set to react more substantially to US Nonfarm Payrolls, thus, the risks are skewed to the upside.

BoC to stay hawkish despite jobs jitter

“BoC’s governor Tiff Macklem delivered some quite hawkish remarks as he claimed the Bank is not ready for a more finely balanced policy, that there is still plenty to be done to curb inflation given lingering excess demand and largely accepting the prospect of a quite hard landing for the economy. In this sense, yesterday’s comments may have worked as a ‘hedge’ against another potential job data disappointment today. 

“We expect the US payrolls impact on USD to be larger than Canada’s jobs data impact on CAD, and see USD/CAD upside risks today even if Canada’s figures come in positive.”

“A re-test of the 1.3830 highs in USD/CAD is a material risk over the coming weeks.”

See: 

• NFP Preview: Forecasts from nine major banks, employment trend slows down
• Canadian Jobs Preview: Forecasts from six major banks, employment to rise but outlook is dimming