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Canada's Job Losses Greater Than Expected

Last updated 1/9/2009 7:22 AM ET (GMT -5) 0 Comments - Add your comment

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Boris Schlossberg

Director of Currency Research, GFT

Canadian unemployment increased by -34K jobs versus forecast of losses of -21K as the unemployment rate inched by another 30 basis points to 6.6% from 6.3% the month prior. In December Canadian economy lost -70K full time jobs while generating 36K part time jobs while the participation rate remained at 67.6%. The net result was worse than market estimates but not dramatically so and the loonie actually gained in the immediate aftermath of the release as traders were relieved that that the contraction in labor force was contained.

Nevertheless the data confirmed that the Canadian economy has been badly hurt by the simultaneous drop in oil prices and collapse of demand for autos which comprise a significant part of the country's manufacturing base. The news will no doubt pressure the BOC to ease further, especially if crude prices remain below $50/bbl putting more stress on Canada's key source of export revenues. .

Meanwhile with Canadian labor data out of the way, focus turns to US Non Farm payrolls due at 13:30 GMT and should the US numbers surprise to the downside the loonie may see some additional strength

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About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.