On Friday, Canada’s employment report showed better-than-expected numbers. The loonie fell against the US dollar but rose against peers. Analysts at CIBC note that the report supports their view that the Bank of Canada will raise interest rates by 50 basis points next week before a pause in 2023. Key quotes: „After a few months, Canada’s labor market moved sideways in November. Gain of 10.1,000 jobs matched consensus expectations, as gains in full-time jobs almost fully offset a decline in part-time jobs. Looking at the volatility associated with this series, the Canadian labor market has been largely flat over the past 6 months with average earnings of just over ,000 per month. “There were no big surprises in this report. Therefore, and given the low unemployment rate, employment structure and strong and steady wage growth, we still expect the Bank of Canada to raise 50 basis points next week before pausing in 2023. The difference, however, between a one-time 50 basis point change and the most a likely option, two consecutive 25 basis point increases, would not be huge for the economy.
