Today, the Bank of Canada will gain further important insight for next week’s rate decision with the labour market report for November. If the data surprises on the upside, the Loonie could surge higher, economists at Commerzbank report.

Continued constraints on the labour market?

“If today’s data remains within the framework of expectations (unemployment rate 5.3%; employment +10K) it should not impress the Loonie much. With a view to the BoC meeting next week the market seems to be expecting a smaller rate step of 25 bps.”

“The analysts polled by Bloomberg are divided. Whereas one half also expects BoC to switch down a gear, the other half expects it to hike its key rate by a further 50 bps. Against this background, a surprisingly strong labour market might well drive rate expectations up again, which would support the Loonie.”

See – Canadian Jobs Preview: Forecasts from five major banks, more lackluster performance