On Thursday 04-09-09 at 7:00 AM ET, the CAD Employment Change and CAD Unemployment Rate reports will be released for the month of March. Both hot reports these days – however, there may be a twist to consider.
At about the same time the Bank of England may be releasing its MPC Rate Statement.
According to some FOREX calendars, the rate statement time is “tentative”.
The previous CAD Employment Change and CAD Unemployment Rate reports came out on Friday 03-13-09 at 7:00 AM ET.
The CAD Employment Change and CAD Unemployment Rate reports released in March, for the month of February, were set up as follows:
Employment Change
Previous Report: -129.0K – not revised.
Economists Forecast: -50.0K – an improvement, but still not good.
The actual report: -82.6K – worst than expected, enough to to move the markets.
Unemployment Rate
Previous Report: 7.2% – not revised.
Economists Forecast: 7.4% – not good.
The actual report: 7.7% – worst than expected, enough to move the markets.
I monitored 4 currency pairs during the March CAD Employment Change and CAD Unemployment Rate reports and here is what happened:
CAD/JPY – moved down about 28 PIPS 1st minute – right direction
moved up about 28 PIPS in 4 minutes – wrong direction
moved down about 40 PIPS in 38 minutes – right direction
EUR/CAD – moved up about 52 PIPS 1st minute – right direction
moved down about 49 PIPS in 2 minutes – wrong direction
moved up about 55 PIPS in 39 minutes – right direction
GBP/CAD - moved up about 52 PIPS 1st minute – right direction
moved down about 50 PIPS in 2 minutes – wrong direction
moved up about 75 PIPS in 16 minutes – right direction
USD/CAD – moved up about 44 PIPS 1st minute – right direction
moved down about 35 PIPS in 2 minutes – wrong direction
moved up about 62 PIPS in 40 minutes – right direction
The CAD Employment Change and CAD Unemployment Rate reports for this month’s release (reports on March) is as follows:
Employment Change – Previous -82.6K
Unemployment Rate – Previous 7.7%
If the “actual” Employment Change report comes out less or more than the “forecast” by a large amount, say 30K or more, this would be a huge surprise for FOREX traders and the market may move considerably in the following minutes of the report.
So, let’s set this up:
Employment Change
The March previous= -82.6K
The economists forecast= -50.2K
If the “actual” report comes out -20.2K or more, this will be good for the CAD, and a big surprise for traders. Any currency pair which includes the CAD may move in favor of the CAD.
Employment Rate
The March previous= 7.7%
The economists forecast= 8.0%
If the Employment Rate comes out higher than the month before and the Employment Change comes out even lower than the March report, this will be bad for the CAD and the market should move accordingly – and opposite for opposite conditions.
If the Employment Change comes out and is in favor of the CAD and the Employment Rate comes out against the CAD or visa-versa – the market may be a little confusing.
Also the Bank of England Rate decision may have an effect on currency pairs.
The probabilities set forth above are assuming no unpredictable events are taking place at the same time.
Speeches on the economy by government officials, or a situation somewhere in the world that could have an impact on the US or Canadian economy – could adversely affect the market.
Sometime after the end of the Employment Change and the Employment Rate reports I will post a results. So, check back!
Friday 04-09-09:
Here are the results of CAD Employment Change and CAD Unemployment Rate reports:
Employment Change
The March previous= -82.6K
The economists forecast= -50.2K
The actual= -61.3K – bad for the Canadian economy
Employment Rate
The March previous= 7.7%
The economists forecast= 8.0%
The actual= 8.0% – bad for the Canadian economy, but has already
been figured into the market.
Here is how it affected the 4 currency pairs I follow:
CAD/JPY – the first minute the market moved down/up/down about 21 PIPS
then ranged about 10 PIPS for 7 minutes
moved down about 15 PIPS in 13 minutes – right direction
moved up about 35 PIPS in 29 minutes – wrong direction
EUR/CAD - moved down about 85 PIPS in 37 minutes – wrong direction
GBP/CAD – moved down about 90 PIPS in 43 minutes – wrong direction
USD/CAD – moved down about 23 PIPS in 2 minutes – wrong direction
moved up about 20 PIPS in 21 minutes – right direction
moved down about 32 PIPS in 14 minutes – wrong direction
I believe the reason the currency market moved as it did, even though the Employment change was bad for the Canadian economy, had to do with the Unemployment Rate coming out as forecast and the employment change was not as bad as forecast.
