AUSSIE 3-YEAR TECHS: (M5) Within Range of Highs

• RES 4: 1.4452/4543 High Mar 13 / 4 and a bull trigger
• RES 3: 1.4415 High Apr 1 
• RES 2: 1.4308 50-day EMA 
• RES 1: 1.4242 High Apr 4
• PRICE: 1.4196 @ 17:10 BST Apr 4
• SUP 1: 1.4028 Low Apr 3
• SUP 2: 1.3986 Low Dec 2 ‘24  
• SUP 3: 1.3944 61.8% retracement of Sep 25 ‘24 - Feb 3 bull run
• SUP 4: 1.3894 Low Nov 11 ‘24 

USDCAD rallied Friday, but remains lower on the week after Thursday’s downleg. The move down has confirmed a clear reversal of the bull cycle between Sep 25 ‘24 and Feb 3. Price is through a key support at 1.4151, the Feb 14 low. This signals scope for an extension towards 1.3944, a Fibonacci retracement. On the upside, key short-term resistance is seen at 1.4308, the 50-day EMA. 

Canadian employment unexpectedly contracted in March, falling by the most since January 2022 at -32.6k (+10.0k expected, +1.1k prior) in a sign that the trade war with the US is spilling over increasingly into the "hard" data. The unemployment rate ticked up 0.1pp to 6.7%, in line with expectations and below the November 6.9% high, though unrounded it rose from 6.55% to 6.71% - the largest increase since November.

• The drop in employment was largely due to a 62.0k drop in full-time positions (after -19.7k, the 2nd straight drop), with part-time up for the 4th consecutive month at 29.5k (after 20.8k prior) - that mix is clearly indicative of hiring uncertainty among firms.
• The monthly full-time drop was the 2nd largest since the pandemic lows in the labour market (April 2020). Goods producing jobs fell by 12k (2nd consecutive decline), while services shed 21k (wholesale/retail trade and Information, culture and recreation led losses).
• The participation rate dipped 0.1pp to 65.2%.
• Wages were soft, dropping 0.2% M/M for the first drop since November, with the Y/Y rate slipping to 3.6% from 3.8% prior. The rise in permanent employees' wages of 3.5% Y/Y was well below the 4.1% expected (4.0% prior).
• Market-implied probability of an April BOC rate cut rose to as high as 68% after the data before settling the day at around 55%. That compares to 40% prior to Wednesday's US tariffs announcement.

• Treasuries remain well supported late Friday, but off early session highs after headlines filtered through markets that Tsy Sec Bessent was "quietly" attempting to moderate Pres Trumps hardline stance.
• Brief risk-off unwind late morning after Pres Trump tweeted "this would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates,"  but Tsys bounced after Chairman Powell's discussion on economy at SABEW conference. Chair Powell expressed patience, now is a "good time to take a step back and let things clarify" while "uncertainty of new policies" decline over time.
• Treasuries dipped then bounced after higher than expected March jobs gain was tempered slightly by down-revision in prior". The latest profile sees 228k after two weak months (111k Jan, 117k Feb) which in turn followed two booming months (261k Nov, 323k Dec).
• Tsy Jun'25 10Y contract is currently +10.5 at 112-31, earlier focus on technical resistance at 114-16 (2.000 proj of the Jan 13 - Feb 7 - Feb 12 price swing) after breaching round number resistance earlier (114-03.5 high). 10Y yield 3.8823% (-.1481) vs. 3.8564 low. Technical support well beow at 112-01 (High Mar 4 and a recent breakout level).
• Curves remain flatter: 2s10s -2.736 at 31.543, 5s30s -5.980 at 68.231. 10Y yield still below 4% at 3.9962 (-.0324) vs. 3.8564% session low.
• Cross asset update: Stocks still weaker, but off recent lows SPX eminis currently trading 5168.25 (-261.75) vs. 5107.5 low, BBG US$ index near recent highs +1264.81 (+12.57). Gold sharply lower at 3029.0.