Canadian jobs figures may tilt market pricing towards another BoC rate hike, but watch for data volatility, economists at ING report.

Key jobs figures to steer rate expectations

As it often happens, Canadian jobs figures will be released at the same time as the US ones, and the USD/CAD reaction will depend on a mix of the two prints.

We think that a jobs report matching consensus would be enough to keep market expectations for more BoC tightening alive. However, data volatility is an issue in Canada, and the chances of a negative read are relatively high.

Unlike previous instances, USD/CAD isn’t overvalued at current levels, and we would favour any CAD strength on the back of good domestic data against other pro-cyclical currencies as opposed to the USD.