For the week of December 5 – 10
Employment data for November was released on Friday for both Canada and the U.S. In Canada, employment figures beat an expected drop of 15K positions, instead increasing by 10.7K. However, similar to recent releases, details were not as strong as the headline suggested. Full-time employment actually fell by 8.7K positions while part-time positions increased by 19.4K. Another surprise was the drop in unemployment rate, to 6.8%, while expectations called for a steady 7%. Hours worked in Canada increased by 1.1% on a year-over-year basis.
Nonfarm payrolls missed expectations very slightly in November in the U.S., adding 178K positions. November’s posting was accompanied by a downward revision of October’s number from 161K to 142K. Much like in Canada, the unemployment rate dropped significantly from 4.9% to 4.6% while expectations were for it to remain unchanged for the month. 4.6% is the lowest unemployment rate seen since the 2008 recession. Hourly earnings fell by 0.1% on a month-over-month basis, although this is being tied to effects of Hurricane Matthew.
Oil prices continue to climb Monday morning, marking the fourth straight day of price gains. The price of a barrel is now comfortably above $50, at $52.02. Despite the climb in oil prices, the Canadian dollar is currently trading down against the US dollar. Monday’s expected range was 1.3254 – 1.3354.
The European Central Bank is expected to extend the current quantitative easing program for an additional six months according to approximately 89% of surveyed economists. However, many expect that this easing may not be required for much longer as growth remains relatively strong and unemployment remains low. However, a failed referendum Italy is expected to heighten volatility and make the future of fiscal stimulus less likely, keeping the ECB on call for additional stimulus. After a 1.5% drop in the Euro upon news of the failed referendum (20-month low), losses have moderated. The ECB will be meeting on Thursday of this week.
The release schedule is fairly quiet in Canada this week besides Wednesday’s Bank of Canada policy meeting and Thursday’s housing starts numbers. It is largely expected that the Bank of Canada will hold interest rates steady. In the United States this week we will see data for the trade balance, factory orders, durable goods orders, and wholesale inventories.