Canada employment report, University of Michigan consumer sentiment index on econ calendar

The economic calendar is relatively light today.

Canada reports their unemployment statistics for the month of February at 8:30 AM ET. Expectations are for:

• Employment change rebound of 160K from the -200.1K decline in January.
• The unemployment rate is expected to dip to 6.2% from 6.5%.
• Full-time employment last month came in at -82.7K.
• Part-time employment last month came in at -117.4.

Last month the expectations were for a decline of -112K (the report came in weaker). The unemployment rate spiked up to 6.5% from 6% the previous month. Omicron had a big impact on the data. Food service jobs fell -113K. Retail jobs fell -26K. A rebound is expected this month.

The Bank of Canada raised rates by 25 basis points at the March 3 meeting despite the weaker data. The BOC commented:

"In January, the recovery in Canada’s labour market suffered a setback due to the Omicron variant,with temporary layoffs in service sectors and elevated employee absenteeism. However, the rebound from Omicron now appears to be well in train: household spending is proving resilient and should strengthen further with the lifting of public health restrictions"

The other key data will be released at 10:00 AM ET with the US University of Michigan consumer sentiment index (preliminary) for March.

The expectations are for a dip to 61.4 from 62.8 (final) in February (released on February 25th). The final reading in February was not impacted by the Russian invasion of Ukraine. It will be interesting to see the impact of that event in this month's report. Oil prices are sharply higher (as are other commodity prices) of course.

In other news, Canada capacity utilization for Q4 will be released at 8:30 AM with expectations of an increase to 82.2% from 81.4% in the Q3.

Looking at the USDCAD USD/CAD The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh Read this Term, it as traded up and down in a confined trading range today (41 pips versus a 22 day average of 93 pips).

The price low today reached 1.2752. The pairs 200 hour moving average is at 1.27514. The current price is trading at 1.2763.

A move below the 200 hour moving average (at 1.27514), followed by a break below the 50% midpoint March range at 1.2743 would tilt the bias more in the direction of the downside (higher CAD).

Conversely the high price today stalled ahead of an old swing area between 1.27826 and 1.27956. The high price reached 1.2793, and backed off. The 100 hour moving average 1.28114 would be another upside target on CAD weakness. Move above both those levels and the bias tilts more to the upside.