What are the main events to watch out for today?

Canada Unemployment Rate id 6554b40b 1f1e 48d2 8769 629b082c2450 size975

There’s no top
tier economic release in the European session today, so the action will likely
be mostly in the US session as we get the Canadian labour market report and the
US University of Michigan consumer sentiment survey.

The Canadian
labour market report is expected to show 18K jobs added in April vs. -2.2K in
March with the unemployment rate ticking higher to 6.2% vs. 6.1% prior. The last report missed expectations across the board with job losses
and a big jump in the unemployment rate. There was also an increase in wage
growth, which is what the BoC is more concerned about, although a looser labour
market should depress wage gains going forward.

Canada Unemployment Rate

The market expects
the central bank to deliver the first rate cut in June, although the
probability for a July move is higher. A weak report will likely raise the probabilities
of a rate cut in June while a strong one shouldn’t change much as the market
will look forward to the Canadian CPI data on May 21st.

The University of Michigan
consumer sentiment is expected to tick lower to 76.0 vs. 77.2 prior. Compared
to the Conference Board consumer confidence report, which is more biased
towards the labour market, the consumer sentiment survey is more weighted towards
consumers’ finances. In fact, analysts believe that it’s a better predictor of
consumer spending than the consumer confidence report, which is also why the expectations
index in the survey is included in the Leading Economic Index (LEI). Do note
that these indicators are more valuable and have a higher impact at turning points
in the business cycle.

University of Michigan Consumer Sentiment

This article was originally published by a www.forexlive.com

Read it HERE


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