Highly anticipated NFP report was released at 12:30 pm GMT and showed the US economy unexpectedly added 261 k jobs in October, compared to upwardly revised 315k gain in September (from 263k) and well above market expectations of 200k.
The jobless rate rose to 3.7% from 3.5% last month and above market estimates of 3.6%.
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Open account Try demo Download mobile app Download mobile appClosely watched wage growth fell to 4.7% YoY, after 5.0% increase in September and in line with market expectations of a 4.7% YoY.
Today's reading signals that the labour market is still tight therefor Fed will remain committed to bringing down inflation with more rate hikes.
Following the data release, swaps have already started pricing in hikes to 5.25% in June 2023! Source: Bloomberg
The US economy added unecpectedly 261K jobs last month, above market forecasts of 200K. Nevertheless it is the weakest reading since December of 2020. Source: Bloomberg
Commenting on the report, Bloomberg chief economist Anna Wong wrote “the jobs report for October sends mixed signals about the labor market, with one survey showing robust job gains while another shows a big jump in unemployment. Filtering the noise in the data, our takeaway is that the labor market is still very tight and much adjustment still needs to occur before unemployment is close to a neutral level. We expect that the Fed will ultimately have to raise rates to 5% next year.”
Simultaneously to the release of US data, the Canadian labour report for October was released.
The Canadian economy added 108.3K jobs in October, easily beating analysts estimates of 10K job gain. Employment rose in several industries, led by manufacturing, construction, and accommodation and food services. At the same time, it fell in wholesale and retail trade, as well as in natural resources. The unemployment rate in Canada was at 5.2 % in October, unchanged from the prior month and below analysts projections of 5.3%.
Source: Labour Force Survey
USDCAD initially currency pair rose after data relese however sellers manage to quickly regain control and price is heading towards upward trendline. Source: xStation5
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