Summary:

• Canadian employment change: +10k vs +12k exp +22k prior
• However, large rise in full-time jobs and better than expected unemployment
• CAD rising on the day

Whilst the US NFP takes the Lion’s share of attention on the first Friday of every month, the Canadian equivalent is equally important for CAD traders. In a similar vein to that seen in the US the Canadian employment change showed a worse than expected headline reading but several positives.

 The composition of Canadian jobs improved markedly in September with a large increase in full-time roles whilst part-time roles substantially declined. Source: XTB Macrobond

The employment change for September at +10k was slightly below the +12k expected and also less than the +22k seen previously. However, closer inspection reveals that the composition of the jobs were far better than the prior release. In August the +22k headline masked a huge surge in part time jobs (+110.4k) and a substantial drop in full time roles (-88.1k). This has been nearly entirely reversed in the most recent data with full time jobs increasing by 112k and part time declining by 102k. 

In addition the unemployment rate was forecast to tick higher to 6.3%, and in this light the drop to 6.2% could be seen as a positive surprise. With the USD impacted by its own employment data the other pairs to the USDCAD may be best to isolate the impact of the Canadian release on CAD. The AUDCAD was one of our 5 trade ideas for Q4 (report here). 

 The Canadian dollar has risen since the release with AUDCAD falling to its lowest level of the day. Source: xStation

Longer term the market is approaching a potentially significant level and not far from its 2017 low. 0.9660 could be seen as a possibly significant support level but should price break below there then further declines may lie ahead.  

 

 Longer term AUDCAD remains in a downtrend and the market is not far from falling to its 2017 low. Source: xStatio