Canada: Recent moves elevates the importance of employment report – Deutsche Bank

Recent moves in BoC’s market pricing elevates the importance of next Friday's Canadian employment report given that there are no other scheduled policy speeches between now and the July meeting, according to analysts at Deutsche Bank.

Key Quotes

“Note that the BoC blackout period begins next Wednesday. We expect another healthy performance in June (+10k forecast vs. +55k previously) with respect to job gains. However, the unemployment rate may remain unchanged at 6.6% as we anticipate the participation rate to increase a tenth.”

“A downside surprise could cause the markets to temper their enthusiasm for a July hike. Poloz has waited this long to even hint at tightening policy. With all three of the BoC's core inflation measures at multi-year lows, the CAD having appreciated 5% over the last two months and the last monetary policy statement noting ongoing excess capacity, we still think he waits just a little bit longer.”