CAD: Event risk to increase from release of trade and employment reports – RBC CM

Adam Cole, Head, of G10 FX Strategy at RBC Capital Markets, suggests that for Canada event risk will increase with the release of today’s trade and employment reports.

Key Quotes

“The June trade data will be more important in the context of recent “serial disappointment” in non-energy exports. RBC is above consensus at -CAD2.5B (cons. -CAD2.8B), with the improvement mainly coming from a 1.2% increase in exports that would more that reverse May’s 0.7% drop.

RBC is also slightly above consensus at 12K for CA July employment (cons. 10K) as a return to oil sands production after the Alberta wildfires starts to reverse employment declines that began in that province in May. Note that services employment can be volatile in July based on swings in the education sector. We see the unemployment rate ticking up to 6.9%. Wednesday’s bullish key reversal day in crude oil has pushed USD/CAD down toward 1.3000 ahead of the data, with support located at 1.2970 and resistance at 1.3130.”