CANADA DATA: SEPH Paints Cooler Labour Market Picture Than LFS Counterpart
The latest Canadian payrolls survey ( Survey of Employment, Payrolls and Hours, or SEPH) showed modest gains of 21.2k in October, cast in an even better light but a substantial upward revision to September (-24.3k vs -58.0 in the initial estimate). This is not a game-changing report for a BOC that is in a holding pattern but overall it is generally more consistent with a softening in broader labor market trends than the higher-profile Labour Force Survey.
- The SEPH has portrayed a less volatile labor market in terms of job gains than the more closely-watched and timely Labour Force Survey which has seen a resurgence in employment in the last couple of months (that being said, they have gone in something of opposite directions of late: LFS employment +127k in Sep + Oct after -106k the prior two months, vs for SEPH -3.1k and +43.2k respectively).
- For its part, SEPH has hit something of an inflection point in terms of trend: the 6-month change in payrolled employees was +49.5k, highest since May (after contractions in July and August), while the 12-month change was an 8-month high +63.1k.
- Wage metrics were more notably soft: the SEPH show 1.5% Y/Y average hourly wage growth, lowest since February 2022, with fixed-weight wages falling to 2.1%, lowest since the end of December 2023. Though we would interpret monthly wage changes with caution, it is painting a looser picture of the labor market than the LFS's wage growth metrics (variable wages +3.5 and 3.6% Y/Y in Oct and Nov, permanent employee wages +4.0% in Oct and Nov).
- Vacancies continue to descend too in the SEPH, with the rate down to 2.6% in October, lowest since February 2017 (ex-pandemic). The outright number of job vacancies was the lowest since October 2017, and they've fallen 12.3% Y/Y.
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MNI: US TSY TICS NET FLOWS IN SEP +$190.1B
- MNI: US TSY TICS NET FLOWS IN SEP +$190.1B
- US TSY TICS NET L-T FLOWS IN SEP +$179.8B
USDCAD TECHS: Bearish Theme
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4170 Channel top drawn from Jul 23 low
- RES 2: 1.4140/67 High Nov 5 / 50.0% of the Feb 3 - Jun 16 bear leg
- RES 1: 1.4062 Intraday high
- PRICE: 1.3996 @ 16:45 GMT Nov 18
- SUP 1: 1.3985 Low Nov 13
- SUP 2: 1.3968 50-day EMA
- SUP 3: 1.3893 Bull channel base drawn from the Jul 23 low
- SUP 4: 1.3888 Low Oct 29 and a key support
The short-term outlook in USDCAD is bearish. Price action is trading inside a bull channel drawn from the Jul 23 low. The top of the channel - currently at 1.4170 - provided a firm resistance on Nov 11. The subsequent move down highlights scope for a bear extension towards the base of the channel at 1.3893. Initial key support to watch is 1.3968, the 50-day EMA. For bulls, a break of the channel top would confirm a resumption of the uptrend.
AUD: AUD/USD - Support Toward 0.6450 Holds As Risk Stabilises
The AUD/USD had a range overnight of 0.6474-0.6518, Asia is trading around 0.6510. Risk has stabilised overnight recovering off its lows albeit ending lower on the day. The AUD/USD again found very good support back toward the 0.6450 area and has moved back above 0.6500 as US stocks recover into the close. Bitcoin had a look below the pivotal $90k area and strong demand has seen the support hold on the first attempt, the markets focus for risk will now turn toward the Nvidia results which come out in the US session. The AUD/USD continues to chop around within its 0.6350-0.6650 range, its first support back toward 0.6440-0.6460 which has been pretty solid the last couple of months, then 0.6350 below that. It would need this move lower in risk to accelerate and become something more significant to challenge down there I would think.
- MNI BRIEF:RBA Outlines Factors That Will Drive Pause - Minutes. Stronger demand, reduced supply capacity and signs that the 3.6% cash rate may not be as restrictive as previously thought could lead the Reserve Bank of Australia to hold rates at coming meetings, minutes of the Board’s November session showed Tuesday.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD640m), 0.6300 (AUD445m). Upcoming Close Strikes : 0.6550(AUD2.28b Nov 21) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 48 Points
- Data/Event: Westpac Leading Index, Wage Price Index
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
