North American Data Disappoints

Traders woke up this morning to the quite shocking news of the US Non-Farm Payroll employment numbers. The market was expecting a print of 151K and the actual reading came in at 69K. Healthcare employment increased by 33K, while transportation and warehousing jobs increased by 36K. One of the biggest sectors to experience a loss was construction, which alone shed 28K jobs. The decrease in construction jobs suggests that government stimulus money in the US may now have left the market. During economic downturns, governments often turn their focus to infrastructure in attempts to spur an economy along.

Because of the weaker-than-expected Non-Farm Payroll reading this morning, the unemployment rate in the US decreased to 8.2% from the previous month's 8.1%. Immediately after the announcement of the NFP, the USD rallied significantly against the CAD, bouncing up almost 50bps.

Turning north of the 49th Parallel, Canadian GDP month over month came in this morning. The market expectation was for a reading of 0.4% and the actual number was 0.1%. The decrease may allow the Bank of Canada and Mark Carney to soften their stance with their next policy announcement next Thursday, June 5th; they were quite hawkish in their last statement. With concerns growing in Europe and the much weaker-than-expected data in North America, the statement could be pointing the markets in a completely different direction.

Have a great weekend!